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With its new Mastercard Installments program, the Mastercard payment network is adding to the growing number of ways consumers can use buy now, pay later (aka BNPL) when making purchases.
Mastercard Installments — which the company says is "coming soon" — will pair with participating lenders to offer payment plans you can use in stores or online where Mastercard is accepted. But there are limitations to know about, as well as some features that differentiate this program from other BNPL options.
How does the Mastercard Installments program work?
Instead of paying for a purchase in full, or taking on credit card debt to pay it back over time, Mastercard Installments allows you to opt in to a payment plan from a participating bank or other financial services app. You can then pay with a single-use digital card to make a purchase where Mastercard is accepted. Payment plans can vary, including options such as the ability to make four equal payments at 0% interest, or to pay down a balance with interest over a longer term.
There are different ways to compare and opt in to payment plans:
Instant approval at checkout: This allows you to choose a payment plan at the moment of purchase, in stores or online.
Preapproval for a future purchase: Access a BNPL offer and store it in your digital wallet to use later.
Mastercard processes card payments, but it does not issue credit cards. A card that has "Mastercard" printed on it runs on that payment network, but the actual account is with a lending bank.
What lenders are partnering on Mastercard Installments?
For now, Mastercard is partnering with specific companies, including:
How is Mastercard Installments different from existing BNPL options like Affirm, Afterpay and Klarna?
Mastercard Installments offers zero liability fraud protection, meaning you won’t be on the hook for the cost of any fraudulent transactions. You can also dispute charges directly through Mastercard.
Note that other BNPL services offer help in the event of fraud, too. You may be instructed to dispute the purchase with the BNPL service itself, or with the bank that issued the card tied to the BNPL service. However, if you need to dispute a charge and the merchant doesn’t resolve that dispute in your favor, you may still be responsible for making payments to the BNPL service, depending on its terms.
What about similar services offered by major credit card issuers?
Increasingly, credit card issuers are beginning to offer comparable payment plan features, along with other ways to access your credit line beyond expensive cash advances.
Offerings such as AmEx Plan It® and My Chase Plan let you divide up qualifying card transactions over a fixed period of time, post-purchase. With these programs, you’d still earn rewards as you would for other purchases (assuming your card earns rewards in the first place). Terms and fees may apply.
However, these kinds of services work only with credit cards specifically from that issuer.
Will I still earn credit card rewards for purchases through Mastercard Installments?
According to a Mastercard representative, this depends on your card issuer’s policies. Mastercard Installments functions separately from your existing cards’ rewards programs.
If you have a large purchase coming up and are hoping to both earn rewards and split the purchase into smaller payments, check with your card issuer first to see whether that’s possible.
Will using Mastercard Installments affect my credit?
Again, it depends, as Mastercard says it's up to the card issuer. A hard credit pull during the approval process could affect your credit. This is something to consider before fully committing to using Mastercard Installments, or any other payment plan.
Other third-party BNPL providers offer some payment plans that don’t involve a hard credit inquiry. Similar offers directly from major credit card issuers generally don't require a hard pull either.
A previous version of this article misstated how purchases work through existing BNPL options and Mastercard Installments. It has been corrected here.