Afterpay Buy Now, Pay Later: 2022 Review

Afterpay divides your purchase into four equal installments with zero interest, but it charges a late fee for missed payments.

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Our Take

5.0

NerdWallet rating 

The bottom line:

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.

Afterpay
Loan amount
$200-$2,000
Min. credit score
None
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Pros & Cons

Pros

  • Offers zero-interest loans.
  • Pauses account after missed payment.
  • Includes access to rewards program.

Cons

  • Charges late fee.
  • No option to build credit.

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Full Review of Afterpay

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

It’s a similar financing option to Klarna and Zip (previously Quadpay), which also allow shoppers to split up their purchase into smaller installments without paying interest.

Although the best way to pay for a purchase is typically with cash, this type of BNPL payment plan can be a good alternative if you need to break up a big-ticket expense. Just make sure you can afford the payments and make them on time.

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

Not disclosed.

Late fee

$8.

Other fees

No other fees.

Option to reschedule a payment

Yes.

Pauses account when payment is missed

Yes.

How does Afterpay work?

Afterpay offers a pay-in-four payment 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.

To make payments, you can use a debit card, credit card or bank account. 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.

If you’ve used Afterpay for a while and have a strong repayment history, your payments may instead start after two weeks, giving you a longer repayment plan.

Afterpay doesn’t charge interest with its plan, so if you pay on time, you essentially use the service for free. However, if you miss the payment date by 10 days, you're charged an $8 late fee. Afterpay will also pause your account after a missed payment, so you can’t continue using the service until you've paid.

Should you use Afterpay?

Afterpay is a reputable provider of BNPL loans, and if you make all payments on time, the plan is relatively risk-free. But BNPL plans often lead to overspending, so NerdWallet recommends only using them to break up an essential expense. Make sure to read Afterpay’s terms carefully before agreeing to the loan.

Afterpay may be a good option if you:

Are looking for a straightforward BNPL option: Unlike other BNPL providers, Afterpay offers only one zero-interest payment plan to all shoppers. Some companies, like Affirm, negotiate their underwriting criteria with each merchant, so your interest rate and repayment options will change based on where you shop.

Plan to set up automated payments: Afterpay recommends setting up automatic payments so you don’t accidentally fall behind on your payment plan. If you opt in, your payment method will be automatically charged on each due date, which can help you avoid late fees — as long as you have enough money in your account. The company will send a reminder before each payment is due.

Want access to a rewards program: Afterpay’s Pulse Rewards program is a unique perk among BNPL providers. It rewards you for responsible repayment behavior by letting you earn points for each on-time payment you make. Points can eventually lead to more payment flexibility (like the ability to delay payment up to seven days), give you access to exclusive discounts or can be cashed in for gift cards. Pulse is only available in the Afterpay app.

Afterpay is not a good idea if you:

Want to build credit: Though many BNPL companies do not report on-time payments to the credit bureaus, some have opt-in credit reporting or will report for certain loans. With Afterpay, payment history is never reported, meaning 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.

Sometimes miss payments: Following a 10-day grace period, Afterpay will charge a late fee for missed payments, which not all BNPL providers do. And although Afterpay only charges 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.

Have a habit of overspending: Afterpay will likely boost your credit limit as you make additional purchases and successfully pay them off. If you have a hard time building an emergency fund or paying down other debts, this feature could encourage you to overspend and fall behind on other financial goals.

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How to get approved for Afterpay

To be eligible for Afterpay, you’ll need to be at least 18 years old, be a U.S. resident and have a verifiable email address and phone number.

Approval decisions are instantaneous and will depend on a number of 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 does not hurt your credit score. While Afterpay does not disclose its minimum credit score requirement, borrowers with bad credit or no credit are likely eligible to use Afterpay’s payment plan.

How does Afterpay compare?

APR

Terms

Fees

Affirm
NerdWallet rating 

on Affirm's website

0%-30%.

4 installments, due every 2 weeks; monthly payment plans range from 3-60 months.

No fees.

Afterpay
NerdWallet rating 
See my rates

on NerdWallet's secure website

0%.

4 installments, due every 2 weeks.

$8 late fee.

Klarna
NerdWallet rating 
See my rates

on NerdWallet's secure website

0%.

4 installments, due every 2 weeks.

$7 late fee.

PayPal
NerdWallet rating 
See my rates

on NerdWallet's secure website

0%.

4 installments, due every 2 weeks.

No fees.

Sezzle
NerdWallet rating 
See my rates

on NerdWallet's secure website

0%.

4 installments, due every 2 weeks.

  • $0 late fee.

  • $5 rescheduling fee.

  • $10 account reactivation fee.

Zip
NerdWallet rating 
See my rates

on NerdWallet's secure website

0%.

4 installments, due every 2 weeks.

  • $1 convenience fee per installment.

  • $5, $7 or $10 late fee.

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 directly integrated into their online checkout. That means when you’re ready to pay, you can apply and opt into Afterpay directly 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 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 may be mentioned in the review but are not part of the rating process. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.