Best Buy Now, Pay Later Apps – Buy now, pay later (BNPL) apps, also known as “pay-in-4 apps,” let you divide your purchases into four interest free installments: you’ll pay 25% upfront and 25% more every two weeks until your purchase is paid off.
Unlike a new line of credit, you can get instantly approved for buy now, pay later, and if you meet the right criteria you also won’t even have to pay interest. So instead of paying $100 upfront for Airpods on Amazon, you’ll only have to pay $25 every two weeks.
Best Buy Now, Pay Later Apps:
- Affirm: Best for big purchases and long terms
- Afterpay: Best for gift shopping
- PayPal Credit: Best for widespread acceptance
- Sezzle: Best for payment scheduling
- Klarna: Best for paying $0 upfront
- Zip: Best for in-store purchases
An interest-free loan that you’re instantly approved for certainly sounds ideal. So, what’s the catch? How will BNPL affect your credit? Are there any hidden fees? And overall, which apps are the best?
Affirm – Best for long repayment terms:
Why Affirm stands out: In addition to paying in four installments, Affirm offers longer loan terms on large purchase amounts. APRs range from 0% to 36%.
Available at checkout or via virtual card — Affirm is a checkout option when you shop on participating retailers’ websites, such as Adidas, Walmart and West Elm. But you can also use Affirm online or in stores that don’t offer it at checkout. You’ll just need to apply for an Affirm loan online or on the Affirm app. If you’re approved, funds will be loaded onto a one-time virtual credit card that you can use where Visa is accepted.
Down payment — Affirm may require a down payment if you don’t qualify for a loan that covers the full cost of your purchase.
No fees — Affirm loans have no fees, including no service fees or late fees.
Considers a range of factors — Affirm looks at factors beyond your credit scores, such as your account and payment history with the company, when considering your application for a loan.
Afterpay – Best for Gift Shopping:
Terms: Pay in 4 installments
Competitve features: Steep discounts on luxury goods
Afterpay follows a traditional pay-in-4 payment plan, charging you a quarter of the purchase price upfront, then the remaining quarters every two weeks.
Browse Afterpay’s current deals and you’ll quickly pick up on a theme: this is not exactly essential stuff. Afterpay mostly partners with luxury, lifestyle, fashion, and home decor brands. It seems mostly like a retail therapy destination, but that doesn’t mean you can’t make some essential purchases there, like business attire and exercise clothes.
Plus, I like how Afterpay has a dedicated tab for small businesses and also highlights sales and BOGO deals within its own dashboard.
PayPal Credit – Best for Widespread Acceptance:
PayPal offers a pay-in-four plan and monthly payment options. You can use PayPal to buy now, pay later online at retailers like Apple, Home Depot and Best Buy.
How to get approved: PayPal conducts a soft credit check, which won’t hurt your credit score. Approval is based on a few factors, like 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 for larger purchases 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.
Sezzle – Best for payment flexibility:
Why Sezzle stands out: Like Afterpay, Affirm and Klarna, Sezzle lets you pay over four interest-free installments. But with Sezzle, you can also reschedule your payments, delaying payment for up to two weeks if necessary. While your first reschedule is free, take note that any additional reschedules come with a fee.
Available at select stores — Sezzle can be used as a payment method at participating retailers or at checkout with the Sezzle Virtual Card online or in store.
Soft credit inquiry — Sezzle does a soft inquiry credit check that doesn’t affect your credit.
Ability to build your credit — Sezzle offers you the option of having your payment history reported to the credit bureaus. If you’re trying to build your credit, choosing this option and making payments on time and in full could help improve your credit scores.
Down payment likely required — You’ll most likely need to make a purchase down payment of 25%, which counts as your first installment payment.
Rewards program — Sezzle Spend provides account credit through promotions, which you can use toward the final installment payment on future purchases.
Klarna – Best for Paying $0 Upfront:
Terms: Pay in 4 installments; pay in 30 days
Competitive features: Pay in 30 lets you defer 100% of principal for a month
Klarna is a popular app with a giant vendor list and a unique twist on the BNPL formula.
In addition to your typical pay-in-4 schedule, Klarna offers a pay-in-30 plan where you pay nothing up front, and pay your principal in full exactly 30 days later. As long as you make the full payment, Klarna charges no interest.
Pay-in-30 is useful if you’re really squeezed for cash this month but need to make a large essential purchase. For example, maybe you just got your first job out of college, and at the same time you need to buy a quality mattress. Spending a thousand bucks on a mattress is a good investment for your health and happiness, but payday isn’t for three weeks and you only have $203 in your checking account. Pay-in-4 won’t work because you’ll overdraft, but pay-in-30 is perfect.
For better or worse, Klarna doesn’t report payments to credit bureaus. That’s a lucky break if you missed payments since it won’t impact your credit score, but a bit of a downer if you pay on time since it won’t boost your credit score either.
Zip – Best for user experience:
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 Shein, Best Buy and GameStop.
How to get approved: Zip performs a soft credit check. Beyond that, the company doesn’t publicly share how it approves customers, though it says it uses machine learning, which takes into account numerous factors.
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 may charge an installment fee for using its pay-in-four plan, which is essentially interest. This fee is typically $1 per installment, so a total of $4 per order, but it can be as high as $7.50 per order.
Fees: Zip charges a $5, $7 or $10 late fee for missed payments, depending on the state you live in. If you reschedule a payment more than once per calendar month, you may pay a $2 rescheduling fee.
