Afterpay vs LatitudePay: what is the difference between the two BNPL services?

•  Afterpay allows you to buy what you want and pay for it in four equal instalments spread over six weeks. You'll pay the first instalment at the time of purchase, which is usually equal to 25 per cent of the total purchase price.
  
  

•  The amount of money you can spend using Afterpay is variable. When you sign up on Afterpay, you'll be given an estimated spending limit, which generally starts at around $600. This limit may increase as you continue using the account responsibly by making timely repayments. 
  
  

•  Afterpay doesn't charge any interest or joining fee to users. However, you'll be charged late fees if you fall behind on your repayment schedule. The good thing is that the late fee charged by Afterpay is capped and doesn't compound.

•  LatitudePay lets you spend between $150 and $1,000 and repay your purchases in 10 weekly instalments. The first payment is due when placing the order and equals 10 per cent of the purchase price. 
  
  
•  LatitudePay doesn't charge you any interest or joining fee, but there's a $10 late fee for every repayment you miss. It's worth reading the terms and conditions closely to determine the maximum amount you may be charged in late fees if you fall behind on your repayments. 
  
  
•  The LatitudePay app experience is quite intuitive, with several dashboards to view your shopping history, change your payment days and better manage your expenditure.

Afterpay doesn't specifically mention a maximum spending limit on the website, but it is known to cap your spending to a maximum of $1,500 per order. However, not everybody is allowed to spend up to the maximum limit. New users are generally offered a spending limit of $600 that could gradually increase based on their repayment history. Linking your Afterpay account to your credit card may fetch you a higher spending limit than using your debit card. However, you should remember to pay your credit card bill on time, or you might end up paying interest to your credit card issuer, and your credit score could also be affected.

LatitudePay allows users to spend between $150 and $1,000, depending on their credit scores. The spending limit doesn't depend on whether you link your account to your credit card or debit card. It is simply determined by your credit score that reflects your ability to service new debts.

Both Afterpay and LatitudePay allow you to buy what you want and pay for it in smaller instalments over several weeks. With Afterpay, you need to pay 25 per cent of the purchase price upfront. The rest of the amount is payable in three equal instalments that fall due every two weeks. 

 With LatitudePay, you only need to pay 10 per cent of the amount at the time of the purchase, and you get 10 weeks to repay your purchases. Instead of three fortnightly repayments after the initial payment, you make 10 weekly repayments (starting on the day of purchase) when using LatitudePay.

 Both platforms allow you to pay your debts early without charging any additional fees. It's also possible to reschedule your payment dates on both Afterpay and LatitudePay to avoid incurring late fees.

 With Afterpay, you can reschedule three payment dates (by up to five days each) per year. LatitudePay also lets you reschedule your payment dates. However, instead of a yearly cap, you can shift one payment date per open plan on LatitudePay.

Both Afterpay and LatitudePay are free to use if you can keep up with your repayment schedule. However, missing a repayment will lead you to pay late fees on both platforms. 

At the time of writing, Afterpay charges a maximum of one $10 late fee per order that costs less than $40. For each order worth $40 or more, the total of the late fees that may be charged to you is capped at the lesser of 25 per cent of the order value or $68.  

Afterpay will pause your account if you miss a repayment, so you can't spend more money on the app. Once you miss a repayment, you can only make new purchases after you clear your outstanding debt.

LatitudePay will charge you a $10 late fee when you miss a repayment. LatitudePay doesn't mention any capped fee, and you're charged a $10 late fee for every repayment you miss. However, the website says your spending limit will decrease if you miss more than three payments, and your account will be permanently blocked if you miss five payments on a plan.

Afterpay doesn't run any external credit checks on users. If you're 18 years old and you have a credit or debit card, you could get an Afterpay account, irrespective of your credit history or existing debts. LatitudePay, on the other hand, carries out a soft credit check before approving an account. 

Even though some credit reporting agencies will report a soft enquiry on your credit file, it's unlikely to harm your credit score unless you make multiple applications for credit in a short time span. From the service provider's point of view, carrying out a credit check indicates responsible lending. It prevents LatitudePay from advancing you a loan that you might find difficult to afford. 

LatitudePay could also report payment defaults to credit bureaus, impacting your credit score negatively. However, BNPL services don't report positive financial behaviour, and using BNPL cannot help you improve your credit score like using a credit card. Note that unlike LatitudePay, Afterpay doesn't run a credit check on you or report late payments to credit bureaus.

Both Afterpay and LatitudePay allow you to break down your purchases into easily manageable instalments without charging any interest. Afterpay enjoys a relatively larger user base than LatitudePay and also offers a higher maximum spending limit. However, you can only have up to three open payment plans on Afterpay, and you'll need approval from the platform before every purchase. 

 With LatitudePay, you can have up to 12 open payment plans up to your maximum spending limit. It's also possible for 1bill users to split their utility bills across 10 weekly payments using LatitudePay.

 The time you get to repay your purchases also differs between the platforms. While Afterpay gives you six weeks to repay your shopping amount, you get four extra weeks to budget your purchases on LatitudePay. Overall, both services are similar, and depending on how much money you wish to borrow and where you want to shop, either of the two could be suitable for you. 

 Irrespective of whether you use Afterpay or LatitudePay, it's important to remember that BNPL is just another form of credit. While it's possible to use a BNPL service as a budgeting tool to split your purchases into smaller instalments without incurring any interest, there's always the risk of signing up for more than one service or buying more than what you can afford to repay. If you're not careful to spend within your budget, it could lead you to fall behind on your repayments and land in potential debt.

 A good rule of thumb could be to always calculate your repayments for a product or service you wish to purchase using BNPL and check whether this number sits comfortably in your budget. If you find it difficult to control your spending or you've had trouble managing credit in the past, it may be better to save for your purchases instead of using BNPL or other forms of credit for shopping.