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“Buy now, pay later” is a type of payment plan that has become more popular over the past few years and is now offered at most major retailers.
Known as BNPL, these plans divide your payment into a series of smaller, equal installments, usually with no interest and minimal fees.
Plans can be used online and in stores, depending on the app. Some retailers will even offer multiple plans to choose from during checkout.
Here are seven popular BNPL apps you can use, plus alternatives to consider.
Affirm offers a wide range of BNPL plans, including a standard pay-in-four and monthly payment plans. It partners with major retailers like Amazon, Walmart, Pottery Barn and Best Buy.
» READ: NerdWallet’s Affirm review
How to get approved: Affirm may perform a soft credit check, which doesn’t hurt your credit. It may also consider prior payment history with Affirm, how long you’ve had an Affirm account, any outstanding Affirm loans, your credit utilization, current debts and income, and any bankruptcies.
Payment schedule: Affirm offers a pay-in-four option, in which your purchase is divided into four equal installments, due every two weeks, with the first installment due at checkout. It also has three-, six- and 12-month repayment plans. Longer plans up to 60 months may be available.
Interest: Affirm’s pay-in-four plan charges zero interest. Rates for Affirm’s monthly plans range from 0% to 36% annual percentage rate, or APR.
Fees: Affirm doesn’t charge fees, including no fees for late payments.
Afterpay offers pay-in-four and monthly payment plans to users. It partners with retailers like Bed Bath & Beyond, Old Navy, Nordstrom and Gap.
» READ: NerdWallet’s Afterpay review
How to get approved: Afterpay may perform a soft credit check for first-time users. As part of its approval process, Afterpay may also consider whether there are sufficient funds on your debit or credit card, how long you’ve been using Afterpay, the purchase price and whether you have other outstanding loans with Afterpay.
Payment schedule: Afterpay offers a pay-in-four payment plan and monthly plans of either six or 12 months.
Interest: Afterpay doesn't charge interest for its pay-in-four plan. Its monthly plans range from 0% to 35.99% APR.
Fees: If you pay on time, there are no fees with Afterpay. If you miss a payment, it charges a late fee of up to $8 if the payment isn’t received within 10 days of the due date.
3. Apple Pay Later
Apple offers a pay-in-four plan available at any merchant that accepts Apple Pay online or in-app. Users can apply for Apple Pay Later in the Apple Wallet.
How to get approved: Apple will conduct a soft credit check as part of its application. Apple has not released any other approval criteria.
Payment schedule: Apple offers a pay-in-four plan, which divides your purchase into four equal installments at checkout.
Interest: Apple doesn’t charge interest for its Pay Later product.
Fees: Apple doesn’t charge fees, including no fees for late payments.
Klarna offers multiple payment plans to choose from, including a pay-in-four plan and monthly financing options. Klarna is available at major retailers like Macy’s, Etsy, Foot Locker and Sephora.
» READ: NerdWallet’s Klarna review
How to get approved: Klarna will conduct a soft credit pull. Approval decisions are based on available funds in your bank account, your history with Klarna and the purchase amount.
Payment schedule: Klarna’s pay-in-four plan splits a purchase into four equal installments. The Pay in 30 gives shoppers 30 days after the item has shipped to pay for a purchase. Klarna also has a monthly financing option with terms ranging from six months to two years.
Interest: Klarna’s pay-in-four plan and Pay in 30 are interest-free. Klarna’s monthly payment plans charge 0% to 29.99% APR.
Fees: Klarna will charge a late fee of up to $7 for payments that are more than 10 days late.
PayPal offers a pay-in-four plan and monthly payment options. You can use PayPal to buy now, pay later online or in PayPal’s mobile app at retailers like Dillard’s, Target, GameStop and Home Depot.
» READ: NerdWallet’s PayPal review
How to get approved: PayPal conducts a soft credit check for its Pay in 4 plan. It may conduct a hard credit pull when you apply for monthly financing. Approval is based on your application, your account history with PayPal and information provided by the credit bureaus.
Payment schedule: PayPal’s Pay in 4 plan divides your purchase into four equal installments. PayPal also offers a monthly payment plan with six-, 12- or 24-month terms.
Interest: PayPal doesn't charge interest with its Pay in 4 plan. Its monthly payment plan may charge 9.99% to 29.99% APR.
Fees: PayPal doesn’t charge fees, including no fees for late payments.
Shoppers can use Sezzle's pay-in-four plan online and in stores at thousands of retailers, including Target.
» READ: NerdWallet’s Sezzle review
How to get approved: Sezzle may conduct a soft credit check, which will not affect your credit score. It will also consider any prior history with Sezzle when determining your spending limit.
Payment schedule: Sezzle offers a pay-in-four payment plan. Your purchase will be divided into four equal installments due two weeks apart, with the first payment due at checkout.
Interest: Sezzle doesn't charge interest for its pay-in-four plan.
Fees: Sezzle doesn't charge late fees, but it deactivates your account after 48 hours when you miss a payment, and you'll need to pay a reactivation fee of up to $15 to use Sezzle again. Sezzle may also charge a fee of up to $5 for paying by debit or credit card after your initial payment.
Zip’s pay-in-four plan is available anywhere Visa is accepted when you download Zip's mobile app. It also partners directly with some stores, including Sears and Best Buy.
» READ: NerdWallet’s Zip review
How to get approved: Zip performs a soft credit check. Beyond that, the company doesn't publicly share how it approves customers. It will likely depend on whether there are sufficient funds available on your debit or credit card, your history with Zip and the purchase price.
Payment schedule: Zip uses the pay-in-four model. Your purchase is split into four equal installments to be paid every two weeks, with the first due at checkout.
Interest: Zip charges an installment fee for using its pay-in-four plan. This fee ranges from $4 to $6, depending on the purchase amount, and it is essentially interest.
Fees: Zip charges a $5, $7 or $10 late fee for missed payments, depending on the state you live in.
Compare buy now, pay later apps
Apple Pay Later
Should you use a buy now, pay later app?
NerdWallet recommends paying for nonessential purchases with cash whenever possible. Though BNPL may seem like a convenient payment option, it’s still a form of debt.
Consider these pros and cons when deciding whether to apply for a pay-later offer.
No interest financing: Most BNPL apps charge zero interest for their pay-in-four loans. That means if you make all payments on time, you use the service for free. It’s rare to be able to finance a purchase, especially a bigger ticket item like a computer, at zero interest.
Soft credit check only: Unlike applying for a credit card or loan, BNPL apps won’t usually conduct a hard credit pull, which can temporarily lower your score. Also, if you’re worried about a low credit score, you may have an easier time getting approved by a BNPL app than a traditional lender.
Simple, convenient and fast financing option: BNPL apps pride themselves on the simplicity and ease of their payment plans. Often integrated directly into the checkout process, applications are short and approval decisions are instantaneous, so you can opt into a BNPL payment plan within minutes.
Could encourage overspending: BNPL plans can make it feel like you’re spending less than you are. For example, if your budget for a purchase is $100 and you opt into a pay-in-four plan, you’ll only pay $25 upfront. For some shoppers, it may be tempting to go back and fill up their cart with more items.
May not be able to build credit: Most BNPL companies don't regularly report on-time payments to the three main credit bureaus, so you won’t be able to build credit by using these plans. However, some apps send past-due accounts to collections, which can hurt your credit score.
Fees: Though some BNPL apps won’t charge any fees, many do — especially if you miss a payment. Fees can range from $1 to $15, represent a significant percentage of the total and increase the cost of your purchase.
Customer service issues: Some BNPL users may have trouble settling disputes. For example, if you buy an item you need to return, you must deal directly with the store, even though your loan is through the BNPL lender. This can delay your refund. Some lenders also offer online-only customer service, so you can’t call for more information.
Alternatives to buy now, pay later
Though buy now, pay later can provide a simple and convenient way to cover a purchase, it doesn’t offer the same perks as other financing methods. You may want to consider these alternatives.
0% interest credit card: If you have good or excellent credit (a credit score of 690 or above), you could qualify for a 0% APR credit card, which charges zero interest during the card’s introductory period — usually 15 to 21 months. Credit card companies will report payments to the bureaus, which may help build your credit. You may also receive a sign-up bonus or access to a rewards program.
Small personal loan: If you want a longer repayment period, a small personal loan could be a smart choice. Loans are available for borrowers across the credit spectrum, and like credit cards, you can show a history of on-time payments to the bureaus. You’ll pay interest on a personal loan, but with longer terms, the monthly payment may fit more comfortably in your budget.
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