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- Buy now, pay later apps allow for deferred payment on today's purchases. The best buy now, pay later apps include Affirm, Afterpay, PayPal Pay in 4, Perpay, Sezzle and Zip.
- Although convenient, your credit may be affected if you do not meet the repayment schedule.
- Consider fees, APR rates, credit reporting and repayment terms when choosing the best BNPL app for your needs.
If a retailer offers the option to pay using a buy now, pay later app, you may be able to buy more than you normally would. You’ll apply at the point of sale, and if approved, the purchase will be divided into equal installment payments. Sometimes the payments are small and don’t include steep fees or interest charges.
Buy now, pay later (BNPL) apps offer an affordable, convenient way to make purchases. Some BNPL companies also report to the credit bureaus to help you build credit, assuming you make timely payments. Still, they may not be the best option for you as you could be tempted to overspend and incur significant penalties if you fall behind on payments.
Top 6 buy now, pay later apps
Here are the top buy now, pay later apps if you’re in a financial bind and need to make an important purchase:
|Google Play rating
|App Store rating
|Affirm Pay in 4: No interest charges or late payment penaltiesMonthly payments: APR of up to 30 percent
|Pay-in-4 orders: Late payment fee of up to 25 percent of the purchase price
|PayPal Pay in 4
|No interest charges or late payment penalties
|No interest charges or late payment penalties
|No interest chargesRescheduled payment fees, failed payment fees and convenience fees may applyReactivation fee of $10.00 if your account is disabled due to nonpayment
|Zip (previously Quadpay)
|Installment fee of $4.00 per order (or $1.00 per installment)Late payment penalty of up to $7
Affirm is a buy now, pay later option that skips late payment penalties, making it a top choice for consumers. It’s accepted at more than 102,000 retailers nationwide, and you can make interest-free purchases by selecting the four-installment payment plan. But if you decide on the monthly payment option to get a longer repayment period and credit limit of up to $17,500, your purchases could accrue interest. There’s an upside, though as Affirm charges simple interest, which prevents your balance from growing over time.
- Accessible online or via the mobile app (for in-person purchases)
- No interest charges on purchases made using Affirm Pay in 4
- Build credit with monthly payment option
- No late payment penalties
- Purchases made with the monthly payment option could be subject to interest
- Late payments could hurt future approval odds
- Payments made on Affirm Pay in 4 can’t help build your credit
Afterpay is another buy now, pay later app that lets you make purchases now, but you’ll pay over six weeks in four interest-free installments. It can be used for online purchases, or you can pay at participating retail locations using the virtual card. Plus, you can change the due date of an upcoming payment without incurring penalties. You can get started with Afterpay without impacting your credit score since the app only does a soft credit pull.
- No interest on purchases
- Soft pull when applying for an account
- Shop online or in-store
- Earn rewards by shopping with Afterpay and paying on time
- Late payment penalty of up to 25 percent of the purchase amount
- First payment required at the point of sale
- Does not help build credit, as timely payments aren’t reported to the credit bureaus
PayPal Pay in 4
You can use PayPay Pay in 4 to split up purchases between $30 and $1,500 to make them more affordable. The first payment is due at the point of sale, and the remaining three are payable bi-weekly. This payment option has no sign-up fees or interest charges, and you won’t be subject to late payment penalties.
- No interest charges or late payment fees on purchases
- Accepted at millions of online retailers
- No hard credit check required
- Includes purchase protection to keep your information secure
- Only available in select states
- Not accepted for in-store purchases
- Purchases capped at $1,500
Perpay is a buy now, pay later app that offers consumers the best of both worlds – you can make everyday purchases and pay over time while building your credit. You could get approved with less-than-perfect credit as there’s no credit check. The average user sees an increase of 36 points when using the app, and payments are automatically deducted from your paycheck to make it easier to manage your account. Payment history is reported to the major credit bureaus to help boost your credit health.
- No credit check
- Interest-free purchases payable over time
- Consumers with bad credit may qualify
- Access higher spending limits and more affordable payments over time
- Purchases must be made through Perpay’s marketplace
- Repayment limited to direct deposits through payroll
- Shipment delayed until receipt of the first payment
Also, an interest-free buy now, pay later option, Sezzle is quite flexible as you can qualify for a generous credit limit of up to $2,500 and make four interest-free payments over six weeks. Plus, you’ll get the luxury of rescheduling one payment per purchase for up to two weeks without incurring additional fees. You can also reschedule subsequent payments to meet your needs, but a fee will apply.
- Can be used online or in-person at more than 45,000 stores
- Soft credit check that won’t impact your credit score
- No interest charges or late fees
- 25 percent down payment requirement
- Up to $15 reactivation fee for disabled accounts
- May be subject to failed payment or convenience fee
Zip (previously Quadpay)
Previously known as Quadpay, Zip can be used online or in-store with a virtual card where Visa is accepted. You’ll repay what’s owed in four installments over six weeks, with the first installment due at checkout. There’s no credit check when you apply, and account activity won’t impact your credit score since Zip doesn’t report to the major credit bureaus.
- Instant approvals
- No interest charges on purchase
- Good credit is not required
- No adverse credit reporting for late payments
- First payment due at checkout
- Installment fee of up to $6 per order
- Late payment fee of up to $7
Pros and cons of buy now, pay later apps
Be sure to evaluate the benefits and drawbacks of buy now, pay later apps before applying for a loan.
Consumers often gravitate towards this payment method over others because of its convenience. You’ll find it’s more easily accessible than a credit card or personal loan, especially if you have bad credit. Plus, it’s relatively simple to apply, and you’ll know immediately if you’re approved, along with the payment plan terms. Another major perk is that many apps don’t conduct a hard credit check – which could lower your credit score – when you apply.
Despite their streamlined application process and straightforward payment plans, these apps come with drawbacks worth considering. For starters, you could easily become overextended if you overspend and struggle to keep up with the payments, possibly leading to late fees and adverse credit reporting. Some apps report on-time payments to the credit bureaus, but others don’t. So, your credit health may not reap the benefits even if you make timely payments or pay the loan early.
How to compare apps
When evaluating buy now, pay later apps to find the best option, consider these factors:
- Availability: Can the app be used online and in-store, or is it limited to one or the other?
- APR and fees: Does the app charge interest or fees on purchases? Are there late payment penalties or early repayment fees?
- Credit reporting: Are on-time payments reported to the major credit bureaus to help you build credit? If not, are late payments reported?
- Interest rates: If applicable, are the interest rates comparable to or lower than what other buy now, pay later apps charge?
- Repayment terms: How long are the repayment periods? Will you repay in equal installments, and what’s the frequency?
Alternatives to buy now, pay later apps
If you would prefer to explore other ways to borrow money before settling on a buy now, pay later app, here are some worth considering:
- Personal loan: This debt product gives you an extended repayment period and a more affordable monthly payment. However, you’ll likely pay far more in interest. Also, remember that the longer the loan term, the higher the borrowing costs.
- 0 percent interest credit card: You can make interest-free purchases during the promotional APR period – typically between 12 and 24 months. Be sure to pay the balance in full before it expires, though, or interest will start to accrue and be added to the outstanding balance.
A buy now, pay later app can alleviate financial stress if you need to make a purchase but don’t have the funds available. The application process is often seamless; you can start making purchases immediately if approved.
Still, these apps aren’t without drawbacks, so you should do your homework and compare options before deciding which app to use or if a financing alternative, like a personal loan or 0 percent interest credit card, would be a better fit.