Afterpay Buy Now, Pay Later: 2024 Review

Afterpay divides your purchase into four equal installments with zero interest, but it charges a late fee for missed payments.
Jackie Veling
By
Last updated on February 21, 2024
Edited by
✅ Fact checked and reviewed
Kim Lowe
Edited by
✅ Fact checked and reviewed

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Our Take

4.0

NerdWallet rating
The Nerdy headline:

If you’re looking for a simple, zero-interest BNPL plan, Afterpay offers a pay-in-four with no fees if you pay on time.

Jump to:Full Review
Afterpay
Afterpay

Loan amount
$200 - $2,000
Min. credit score
None
on NerdWallet's secure website

Pros

  • Offers zero-interest loans.
  • Includes free payment rescheduling.
  • Pauses account after missed payment.

Cons

  • Charges late fee.
  • No option to build credit.
  • Accepts credit card for repayment.
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Full Review

Afterpay provides “buy now, pay later” payment plans for online and in-store purchases at many major retailers, including Old Navy, Nordstrom and Gap.

Its pay-in-four plan comes with no interest and no fees if you pay on time, though it charges a late fee for missed payments. It also offers monthly repayment terms that may help you finance a larger purchase.

» COMPARE: The best buy now, pay later apps

Afterpay at a glance

Loan amount

$200-$2,000.

Payment structure

Pay-in-four plan.

Interest

0%.

Availability

Available online and in stores.

Conducts soft credit check

Yes.

Minimum credit score

None.

Late fee

Up to $8.

Other fees

No other fees.

Option to reschedule a payment

Yes.

Pauses account when payment is missed

Yes.

How does Afterpay work?

Afterpay pay-in-four

Afterpay offers a pay-in-four plan, which lets shoppers divide their purchase into four equal installments, due every two weeks, with the first payment due at checkout.

For example, if your purchase costs $200, you'd pay $50 at checkout. The three remaining $50 payments would be due every two weeks until you’ve paid off the full $200.

Payments are automatically billed to the debit or credit card you used to make the purchase. You can also add your bank account as a payment method. If you’re making an especially large purchase, it’s possible your first payment could be higher than the others, though Afterpay will show the plan’s full breakdown before you pay.

Afterpay doesn’t charge interest for its pay-in-four, but if you miss a payment, you may incur a late fee.

Other Afterpay payment options

Afterpay also offers monthly financing with a six- or 12-month repayment option. These loans charge interest, ranging from 6.99% to 35.99% annual percentage rate (APR) and are not available in Hawaii, Nevada, New Mexico or West Virginia. Afterpay’s monthly financing can be used only at select online retailers for purchases of $400 or more.

Is Afterpay a good idea?

Whether you should use Afterpay depends on your financial situation. Weigh the pros and cons below to decide whether it’s the right fit for you.

Where Afterpay stands out

Zero-interest loans: Afterpay’s pay-in-four divides the total cost of your purchase into smaller installments for zero interest, which may help you pay for something you couldn’t afford upfront. This type of no-interest financing is hard to find among other credit products.

Free payment rescheduling: Afterpay lets you reschedule one payment per order for no additional fee. Not all BNPL providers allow this type of flexibility, and it can help you avoid a late fee by pushing the payment date further out until you have the funds.

Pauses account after missed payment: If you miss a payment, Afterpay will automatically pause your account, so you can’t make additional purchases with Afterpay until you catch up. This consumer safety feature can help prevent you from overextending your budget.

Where Afterpay falls short

Charges late fee: Following a 10-day grace period, Afterpay will charge a late fee for missed payments, which not all BNPL providers do. Although Afterpay charges only one $8 fee per installment and late fees are usually capped at 25% of the order value, this can majorly increase the cost of your purchase.

Payments aren’t reported to the credit bureaus: Though BNPL providers don’t typically report on-time payments to the three major credit bureaus (Equifax, Experian and TransUnion), some have opt-in credit reporting or will report for certain loans. With Afterpay, payment history isn’t reported, so you can’t build credit. Building credit is important because the better your credit score, the more likely you can qualify for other financing products like credit cards or loans.

Accepts credit cards for repayment: Afterpay lets you tie your pay-in-four loan to a credit card for repayment. Though this is common among BNPL providers, consumer advocates argue it’s risky allowing repayment of credit with credit because you can incur additional interest (if you carry a balance on your credit card, for example) or take on too much debt.

What to know about 'buy now, pay later'

You can now use “buy now, pay later” to check out at most retailers. The type of payment plan — and whether it charges interest or fees — depends on the BNPL provider, so it’s important to pay close attention to the loan terms you’re offered at checkout.

For some users, BNPL is a smart way to break up a purchase, especially if you get a zero-interest offer and are positive you can afford the installments. Getting approved may also be easier compared with credit cards or loans because there’s no minimum credit score requirement.

But BNPL is still a form of debt, and there are risks. The Consumer Financial Protection Bureau released a study in September 2022 raising concerns about inconsistent consumer protections, the ease of debt accumulation and overspending, and data harvesting and monetization. Another CFPB study from March 2023 identified BNPL users as more likely to show signs of financial distress.

BNPL pros

BNPL cons

  • Zero-interest plans available.

  • No minimum credit score required.

  • Available at most major retailers during checkout.

  • Some plans may charge interest.

  • Some plans may charge fees.

  • Payments may not be reported to the three main credit bureaus.

  • Easy to overspend.

NerdWallet recommends using BNPL for necessary expenses only. 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.

How to get approved for Afterpay

To be eligible for Afterpay, you’ll need to be at least 18 years old in most states, be a U.S. resident and have a valid email address, mobile phone number, mailing address and payment method. To use Afterpay’s monthly plan, you may need to verify your identity (likely by providing a government-issued ID).

Approval decisions are instantaneous and will depend on several factors, including whether there are sufficient funds available through your debit or credit card, how long you’ve been using Afterpay, the purchase price and whether you have other outstanding orders with Afterpay.

Does Afterpay check credit?

Afterpay may perform a soft credit check, which doesn't hurt your credit score. Afterpay doesn't disclose a minimum credit score requirement, and borrowers with fair or bad credit (689 credit score or lower) may be eligible to use Afterpay.

How does Afterpay compare?

Afterpay is similar to pay-in-four plans offered by Klarna and Sezzle, which also charge zero interest and no fees if you pay on time. Klarna and Sezzle offer monthly payment plans but with longer terms compared with Afterpay.

Interest

Terms

Fees

  • 0% for pay-in-four.

  • 0%-36% for monthly financing.

Affirm
NerdWallet rating
on NerdWallet's secure website
  • Pay in four installments, due every two weeks.

  • Pay monthly, with terms of three to 60 months.

  • No fees.

  • 0% for pay-in-four.

  • 6.99%-35.99% for monthly financing.

Afterpay
on NerdWallet's secure website
  • Pay in four installments, due every two weeks.

  • Pay monthly, with terms of six or 12 months, for online purchases over $400.

  • Late fee: Up to $8.

  • 0% for pay-in-four.

  • 0% for pay in full in 30 days.

  • 0%-33.99% for monthly financing.

Klarna
on NerdWallet's secure website
  • Pay in four installments, due every two weeks.

  • Pay in full in 30 days.

  • Pay monthly, with terms up to 24 months.

  • Late fee: Up to $7.

  • May charge a service fee when you use a one-time card at a nonpartner retailer.

  • 0% for pay-in-four.

  • 9.99%-35.99% for monthly financing.

PayPal
on NerdWallet's secure website
  • Pay in four installments, due every two weeks.

  • Pay monthly, with terms of six, 12 or 24 months, for online purchases of $199 or more.

  • No fees.

  • 0% for pay-in-four.

  • 0% for pay-in-two.

  • 5.99%-34.99% for monthly financing.

Sezzle
on NerdWallet's secure website
  • Pay in four installments, due every two weeks.

  • Pay in two installments, due two weeks apart.

  • Pay monthly, with terms of three to 48 months.

  • Late fee: Up to $15.

  • Convenience fee: Up to $2.50.

  • Payment rescheduling fee: Up to $7.50.

  • Failed payment fee: $5.

  • 0%.

Zip
on NerdWallet's secure website
  • Pay in four installments, due every two weeks.

  • Installment fee: Up to $7.50.

  • Late fee: $5, $7 or $10.

  • Payment rescheduling fee: $2.

How to get Afterpay

Download the Afterpay app

You can get started with Afterpay by downloading its mobile app, creating an account and shopping at Afterpay’s partner stores.

Shop with Afterpay online and in stores

Some retailers have Afterpay integrated into their online checkout. That means when you’re ready to pay, you can apply and opt in to Afterpay on the retailer’s website, even if you’ve never used the service before.

If you want to shop in person with Afterpay, you’ll need Afterpay’s virtual card, which you can download from the app after creating an account. Save this card to your mobile wallet and use it to check out at the register.

Alternatives to Afterpay

If you have good or excellent credit (690 credit score or higher), you may consider a 0% APR credit card. These cards offer introductory periods of up to 21 months and charge no interest during that period. You may also receive a sign-up bonus or access to a rewards program.

If you’re looking to fund a large, essential purchase, you could apply for a personal loan. Personal loans have fixed interest rates and longer repayment terms, and there are options for borrowers with fair or bad credit (689 credit score or lower).

You can pre-qualify with NerdWallet below to see your loan options. Pre-qualifying doesn’t affect your credit score.

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Methodology

NerdWallet’s review process evaluates and rates “buy now, pay later” (BNPL) loan products from the top financial technology providers. We collect over 40 data points from each lender, verify the information with company representatives and compare the lender with others that seek the same customer or offer a similar BNPL product. NerdWallet writers and editors conduct a full fact check and update annually but also make updates throughout the year as necessary.

Our star ratings award points to BNPL providers that offer consumer-friendly features, including: soft credit checks to pre-qualify, zero interest and minimal fees, transparency of rates and terms, flexible payment options, accessible customer service and built-in borrower protections. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

This methodology applies to classic BNPL loans, which divide payment into four equal installments, typically due over six weeks. Some providers offer other loan products with longer terms, which is factored into the rating process. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for buy now, pay later and our editorial guidelines.

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