Alternative ways to shop without a credit card

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Want to go shopping but have no money and no desire for credit cards? Not to worry. Since time immemorial, merchants have consistently devised canny ways of separating customers from their cash. And they are becoming quite creative lately.

Remember the old lay-bys? Okay. Now forget them. Today, lay-bys have been inverted so that you can take home the goods – rather have them put aside for you – while paying them off. And if you are conscientious with your instalments, you will never have to pay interest. Following are just three of the many ways you can shop for items you can’t afford now:

Certegy Ezi-Pay
The catchcry of this payment plan is “No interest ever”. After receiving approval from the company that operates this system, you can shop at thousands of retail outlets around Australia. Ezy-Pay extends a maximum limit of $5000. While there are no interest charges, there are book-keeping fees of $6.45 built into your regular, fortnightly payments. Setting up the account costs between $35 and $90. After your first purchase, subsequent purchases will incur a $22 fee. An unspecified penalty is levied if you are late with a payment.

The Ezi-Pay website has a calculator to work out how much your monthly instalments are across different terms. The minimum term is six months and the maximum is three years.

If you are not one for long, drawn-out repayment plans, Afterpay may suit you. This digital system, which is integrated with the retailer’s software, allows you to make an online purchase and spread the repayments across four equal instalments. Payments are due fortnightly.

It is free for shoppers as the merchant picks up the book-keeping tab. You do have to make sure the debit or credit account Afterpay is linked to has enough funds to cover the instalments. If you do miss a repayment, you will have to pay a late fee of $10 and a further $7 if the instalment remains unpaid for a week.

You can shop online using Afterpay at many of your favourite stores, from David Jones to Big W.

This credit product has been around for decades and has helped me buy most of our household’s bulky goods and electronic equipment. I wait until a major retailer has an interest-free offer over a long term before I go shopping. My favourite terms are obviously the 60-month interest-free plans. Paying instalments over five years makes buying expensive goods convenient.

There is a $25 establishment fee for a new account and an affordable $4.95 monthly charge. A late fee of $20 applies for missed payments.

Rather than paying the minimum monthly instalment (which would leave me with a balance at the end of the interest-free period), I divide the cost of the purchase by the term. For instance, when I spent $1000 on a new bed using the 60-month interest-free offer, I made sure to make at least 59 equal payments of $22 a month. That figure incorporated the monthly charge and allowed me to clear the debt before the 60 months were up.

If you are careless to end up with a balance after an interest-free period your balance attracts a whopping 29.99 per cent interest rate. Let’s say I had a $200 balance at the end of 60 months. In the 61st month, interest of nearly $60 would be added to the balance. If no payments were made, the balance would have climbed to almost $350 in the 62nd month. By the 63rd month my balance would have more than doubled to $460 from the time the interest-free period ended.

This product is not for consumers who struggle with scheduled repayments, but can it can be very rewarding for those who are conscientious about paying their bills. It comes with a few bells and whistles, too. You can access up to $3000 in cash, although this will attract hefty interest from the get-go. For a fee, other features available are:

  • if an eligible item you purchase goes on sale at the same retailer (even if it’s a different location) within six months, Creditline will refund the difference up to $600
  • if an eligible item you buy is lost, stolen or damaged within six months, they’ll pay the cost of it being replaced or repaired up to $1000
  • if your CreditLine card is reported stolen, $200 will be paid into your account just for the inconvenience
  • if you can’t work due to sickness or injury or you lose your job, the account balance can be negotiated down by up to $5000
  • if you pass away, your balance is paid out up to $20,000.

Would you ever buy an item you hadn’t saved up for? Are payment plans more likely to have you wind up in big debt than credit cards?

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Written by Olga Galacho


Total Comments: 14
  1. 0

    Great! Household debt is at record levels, so let’s make it easier to increase it, shall we?

    • 0

      I guess the assumption here is that people will be wise enough to ensure that the debt is repayable. I use a Mastercard Debit Card that draws on my savings account. It works like a credit card, but the funds must be in my account already.

    • 0

      Much more sensible, Knows-a-lot. Sadly, I don’t think the majority are wise when it comes to money management.

    • 0

      I use a credit card, but I pay the full balance before the due date every month. I use it purely for convenience and the benefits such as reward points, free insurance, and clear records of all spending.

    • 0

      Rainey, we do too! If you buy something at the beginning of one month it is not payable to end of following month. And the other benefits like you stated are good as well.
      Your money can be gaining interest in the meantime. Eaccounts are good for better interest as well.
      Also, you have a record of all payments which is another asset for budgeting.
      If you know you are able to pay your bill in full credit cards are fine!

  2. 0

    LifeChoices should not b suggesting those sorts of payment schemes !!

  3. 0

    Maybe some are already using these payment methods & are not fully aware of the costs involved, so in that respect this is a really informative article.

  4. 0

    These plans should not be used unless it is for items that are a real necessity such as HWS, Refrigerator, Washing Machine or repairs such as plumbing or electrical or repairs to a car if you HAVE to use it. New furniture such replacing a BROKEN chair, table or bed I can understand. Most other things you can wait and save for.
    Yes, I have a card so I don’t have to carry much cash but it is a Debit Card. I can’t spend more than is in my bank account and I have a daily EFTPOS limit on my account which is less than the bank would allow.

  5. 0

    Flash someone else’s cash?
    I think you need to go back to school Olga
    On second thoughts , don’t think it’ll help.
    You’re only thinking like a woman

    Tib – where are you ?

  6. 0

    I have used Afterpay with no problems, very convenient, but I always make sure the funds are there, so I never get late fees.

  7. 0

    Don’t buy want you cannot afford. Debt free is how I like to live, I would rather go without. You are only helping these greedy businesses make money.



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