Should I Use Zip Buy Now, Pay Later for Travel Expenses?

"Buy now, pay later" services are a way of financing in-person or online retail shopping. Now, many BNPL companies, including the Zip (formerly Quadpay) buy now, pay later app, offer pay-in-four plans to secure travel bookings, like airfare and hotel accommodations.

If you have unexpected travel come up, you might consider Zip BNPL for travel expenses at checkout. Here’s what to know.

How using Zip for travel expenses works

Zip BNPL offers a pay-in-four installment option. To make travel-related purchases on Zip, follow these steps:

1. Launch Zip and search your travel needs. Open Zip’s buy now, pay later app and search for a travel provider that Zip partners with. Travel providers that support Zip include Hilton, TripAdvisor, Hotwire, JetBlue Airways, Booking.com, American Airlines and Lyft.

2. Choose "Pay with Zip." Once you’ve added your travel expenses to your Zip cart, select “Pay with Zip” to request an installment plan.

3. Confirm your order details. If you're granted spending power with Zip, you'll see the order summary, order total, finance charge and total cost. You’ll also see how much is due today, and the amount due for each remaining installment. Verify everything looks correct. You can also select your preferred payment method during this step. Select “Agree and continue.”

4. Make your first installment payment. Zip automatically fills in your payment details based on your saved payment method. Confirm the details are up to date — including your card’s expiration date and CVV — then, complete the order.

» Learn more: Zip buy now, pay later review

When using Zip for travel expenses might be useful

Paying for travel with Zip can offer a couple of benefits, instead of paying for your travel arrangements in full and upfront.

If you don’t have strong credit or a credit history, Zip can be a straightforward option for acquiring financing for your travel costs. Although it’s short-term financing, it whittles large expenses into bite-sized installments you might otherwise not have access to.

Zip’s BNPL service might be preferred over other buy now, pay later apps because of its payment date flexibility. If you can’t make your installment on the due date, you can change the payment date for free. This feature is available for free once per month. Subsequent payment date changes in the same month incur a $2 fee. It’s a useful perk for travelers needing more flexibility with their BNPL payment due dates that other services might not offer.

Why Zip pay later might not be ideal for travel purchases

There are circumstances when making Zip travel now, pay later purchases is a fair — if not practical — way to pay for travel in smaller bursts. But there are also downsides to financing travel costs with Zip pay later.

1. Upfront installment fee

Zip doesn’t directly charge interest on its four-payment installment plan. Technically, it’s 0% interest. What’s easy to overlook, however, is that it imposes a finance charge, which Zip calls its “installment fee.”

This fee is automatically divided into four and added to each installment payment on your plan. It ranges from $0 to $7.50 per order. How much you’ll pay depends on the order’s purchase price and the Zip product chosen. Although it seems like a relatively small sum for the convenience of avoiding a lump-sum expense, it adds up.

For example, let’s say you’re a member of your best friend’s wedding party and planning a trip across the country to celebrate their special event. You don’t have the cash to pay for everything upfront, so you use Zip pay later for your wedding attire, gift, plane ticket and hotel room. Each of these transactions incur an installment fee. Assuming a $7.50 fee for each expense and an order total of $1,000 for the four transactions, you would pay $30 in fees or a 3% finance charge.

2. No monthly repayment term option

Zip doesn’t offer a monthly payment plan, unlike its competitors. Any Zip travel pay later installments must be made by the due dates within a six-week period.

Americans expect to spend $3,594, on average, toward a summer vacation this year, according to a NerdWallet survey of over 2,000 U.S. adults. With a $7.50 installment fee added to that sum, each installment would cost $900 per payment.

Based on Zip’s pay-in-four option, you would need to make this $900 payment every two weeks which can be restrictive for some people. If you miss a payment, you’ll be hit with a $7 late fee and Zip will automatically pause your account until you are caught up, meaning you won't get approved for additional orders.

Conversely, alternative financing options offer a longer repayment term that can make monthly payments more palatable. And though BNPL can be a convenient and low-cost payment option, you’re still taking on debt, and it’s rarely a good idea to go into debt for a nonessential purchase.

» Learn more: BNPL vs. credit cards: What's the difference?

3. Getting a refund takes time

When making a traditional credit card purchase toward travel, credit card refund timelines vary based on your card issuer’s process. You’ll typically receive a travel refund back to your original payment method within a few days.

With Zip, processing a refund requires the merchant’s approval. Once it receives the funds back from the merchant, it can take up to an additional 13 days for Zip to process the refund. This processing time might not be ideal for people who need their refund faster.

» Learn more: The best travel credit cards right now

Is using Zip pay later right for you?

Zip can be a practical option to get urgent travel on the books, without having to pay for the expense before your trip. If you have an irregular financial situation and need leeway with your payment date, it might be worth looking into Zip.

However, it may not be worth it if you're planning a more costly vacation, as all payments must be complete within six weeks. And many of its competitors, such as Affirm and PayPal, offer a similar payment plan without an installment fee.

If you choose to use Zip for BNPL, be sure you go in with a strategy and know what you can afford.