Zip Buy Now, Pay Later: 2023 Review
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Our Take
3.5
Zip may deliver on ease and convenience, but its pay-in-four plan is more expensive than other BNPL providers.
Pros & Cons
Pros
- Available at many retailers.
- Includes free payment rescheduling.
- Pauses account after missed payment.
Cons
- Charges installment fee.
- Charges late fee.
- No monthly financing option.
- May send past-due borrowers to collections.
- No option to suspend payments while awaiting refund.
Compare to Other Lenders
Full Review of Zip
Zip — formerly known as Quadpay — offers “buy now, pay later” payment plans mostly through its mobile app. You can use Zip pretty much anywhere Visa is accepted, making it widely available for online and in-store purchases.
Zip also partners with retailers like Best Buy, Shein and GameStop so you can split up the cost of your purchase directly at checkout without leaving the retailer’s site.
Zip at a glance
Loan amount | $35-$1,500. |
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 | $5, $7 or $10. |
Other fees |
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Option to reschedule a payment | Yes. |
Pauses account when payment is missed | Yes. |
How does Zip work?
Zip offers one payment plan to its users — a classic pay-in-four — which splits the total price of your order into four equal installments that are due every two weeks, with the first payment due at checkout.
For example, if your total is $100, you’ll pay $25 at checkout. The three remaining $25 payments will be due every two weeks until you’ve paid the full $100. These payments are automatically billed to the debit or credit card you used to make the original payment, and Zip sends email and SMS reminders before each installment is due. You can also turn off automatic billing and make payments manually or early.
Zip may charge an installment fee (sometimes called a finance charge) for each payment. This fee is typically $1 per installment for a total of $4 per order, but it can be as high as $7.50 per order, depending on the purchase price and Zip product used.
Zip also charges a late fee, which is $5, $7 or $10, depending on your state.
Is Zip a good idea?
Whether you should use Zip depends on your specific financial situation. Weigh the pros and cons below to decide if it’s the right fit for you.
Where Zip stands out
Free payment rescheduling: While some BNPL lenders won’t let you change your payment due date, Zip lets you reschedule one payment for free each calendar month. Additional payment changes made within the same month include a $2 fee, which is a lower rescheduling fee compared with other providers. This flexibility can help users avoid a fee altogether or pay a smaller fee overall — for example, a $2 rescheduling versus a $7 late fee.
Pauses account after missed payment: If you miss a payment, Zip automatically pauses your account and won't approve you for additional orders until your missed payment is complete. This can prevent you from incurring more debt. Once you catch up, Zip reactivates your account.
Where Zip falls short
Charges installment fee: Zip’s installment fee is essentially interest, since it’s added automatically to the total loan amount. None of the other major BNPL providers charge this type of fee for their pay-in-four plans, and it makes your purchase more expensive than if you hadn’t used BNPL.
No option to suspend payments: Unlike other BNPL providers, Zip doesn’t suspend your payments while a refund is being processed. For example, if you return an item you bought with Zip to the store, you may be stuck making payments until your refund is processed. It can take up to 13 days for Zip to adjust your payment plan after a refund is issued.
May send borrowers to collections: Zip sends borrowers to collections if their payments are significantly past due. This is an automatic step done by computer, Zip says. Not all BNPL providers send borrowers to collections, and having collection activity on your credit report may hurt your score.
No monthly financing: Zip only offers one type of payment plan, while many BNPL providers offer multiple plans to choose from, including monthly financing. Monthly plans can help finance a larger purchase with smaller installments and a longer repayment period. Monthly plans usually come with interest, though.
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 |
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NerdWallet recommends using BNPL only for necessary expenses. 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 Zip
To be eligible for Zip, you’ll need to be at least 18 years old, live in the U.S. and have a valid phone number, mailing address and payment method. Some applicants may be asked to provide the last four digits of their Social Security number.
Zip says it uses machine learning, which takes into account numerous factors, when making an approval decision, though it doesn’t specify further.
Does Zip check credit?
Zip may perform a soft credit check, which does not hurt your credit score. Zip says it does not rely solely on credit scores and doesn’t state a minimum credit score requirement.
How does Zip compare?
Because Zip charges an installment fee, its pay-in-four is more expensive than pay-in-four plans offered by providers like Affirm, PayPal and Sezzle. These providers also offer monthly repayment options, though you may be charged interest.
Interest | Terms | Fees | |
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Affirm |
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Afterpay |
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Apple Pay Later |
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Klarna |
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PayPal |
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Sezzle |
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Zip |
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» COMPARE: The best buy now, pay later apps
How to get Zip
Download the Zip app
The easiest way to use Zip is to download its mobile app. Once you’ve downloaded the app, you’ll verify your mobile number and create an account by filling out a short application and adding a payment method. If approved, you’ll be shown your spending limit with Zip.
Shop with Zip online and in stores
You may also see a Zip button on some retailers’ online checkout screens, meaning you can opt into Zip without leaving the retailer’s website.
If you want to shop in person with Zip, you’ll need to find the “in-store” tab on Zip’s mobile app, enter a total purchase price and receive access to a virtual card you can use to pay at the counter.
Alternatives to Zip
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.
Find the Best Personal Loan
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.
