I don't think I'm ever going to personally use Afterpay Touch Group Ltd (ASX: APT) to spend money.
Buying now and paying later services are very popular at the moment, particularly with my generation. The Australian growth displayed by Afterpay and Zip Co Ltd (ASX: Z1P) has been truly impressive.
But just because something is popular doesn't mean that it's the right thing to use.
Spreading out the cost of a purchase over a number of instalments for no cost to the consumer, as long as they pay on time, is a great idea as long as it doesn't lead to additional spending.
I think that's one of the key drawbacks with Afterpay. It claims to be able to create new sales for retailers, which might suggest that customers wouldn't otherwise have spent the money. Sure, those customers might continue to pay Afterpay back – but how does their overall financial picture look?
It's like buying a house – just because the bank will lend you a lot of money doesn't mean you have to take it up on that offer.
I think it's best just pay for everything with a debit card (or cash).
Besides, I also don't think it's fair that Afterpay charges such a high fee to retailers, reportedly as much as 6%, for each purchase – I don't want to encourage. Customers may get to use the service for free, but the retailers are having to pay for it. It would be nice if retailers gave the customers who paid upfront a slight discount.
Foolish takeaway
Afterpay is an ingenious service that definitely helps in areas like healthcare. But it's not for me. I like the idea of services that help us save money rather than encourages us to spend more.
