Our pick for wide availability: PayPal
- Buy now, pay later
- Pay in 4 or Pay Monthly
- No signup or late fees
Buy now, pay later financing has become a popular way to float purchases big and small. Platforms like Afterpay, Affirm, Klarna, Sezzle, Zebit and Zip allow you to spread the cost of a purchase over time — sometimes without interest.
Like credit cards and traditional loans, buy now, pay later (BNPL) financing offer flexibility. But beware of hidden fees and know that missing payments could hurt your credit score.
Most BNPL apps work similarly, though there are a few features to keep an eye on when making your choice.
BNPL is a four-part installment loan retailers and third-party intermediaries offer consumers. After making your first payment up front, the remaining three payments are equally split and automatically charged to your credit or debit card on a set interval, typically every two weeks.
BNPL plans are most often found in online stores. However, the service’s rising popularity means you can find them in select stores or use a third-party service to turn nearly any purchase into a BNPL payment.
Like most loans, a BNPL plan also comes with terms and conditions, including interest and fees.
Signing up for a BNPL service usually doesn’t affect your credit. Most companies perform a soft credit check that won’t hurt your score. But missing or making a late payment will, whether it’s reported to credit bureaus by the platform itself or by your bank or credit card holder.
Until recently, on-time payments through a BNPL program weren’t reported to the major credit bureaus. However, as of early 2022, all three major credit bureaus have declared their intent to record consumers’ BNPL activity. That leaves the act of reporting payment activity up to each BNPL service.
Most services offer helpful features like:
BNPL is a useful tool when correctly used. But it does have some drawbacks to watch for.
Buy Now Pay Later companies make money in much the same way as credit card providers. A bulk of BNPL income is comprised of three sources.
None. Most BNPL apps may perform a soft pull on your credit check as part of their review process, but a particular credit score isn’t required for most BNPL apps. Instead, BNPL companies look at a range of factors based on their own requirements, such as financial history and income. This makes BNPL plans easier to qualify for if you have poor or no credit compared to a credit card.
For an idea of how some third-party BNPL services stack up, select up to four platforms and select Compare to see them side by side.
The Finder buy now, pay later (BNPL) report looks into how many American adults used BNPL services in the last six months.
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