Key learning points
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Buy now, pay later apps provide deferred payment for today’s purchases. The best buy now, pay later apps include Affirm, Afterpay, PayPal Pay in 4, Perpay, Sezzle and Zip.
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Although convenient, your credit can be affected if you don’t meet the repayment schedule.
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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 with the Buy Now, Pay Later app, you may be able to buy more than you normally would. You submit your request at the point of sale and if approved, the purchase will be divided into equal installments. Sometimes the payments are small and do not include high fees or interest charges.
Buy now, pay later (BNPL) apps provide 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 end up paying significant fines if you fall behind on payments.
Top 6 buy now, pay later apps
These are the best apps to buy now and pay later if you’re in financial trouble and need to make an important purchase:
| App | Cost | Google Play review | App Store Rating |
|---|---|---|---|
| To confirm | Confirm Pay in 4: No interest charges or late fees Monthly payments: APR up to 30 percent | 4.8/5.0 | 4.9/5.0 |
| Postpay | Pay-in-4 orders: Late payment fees up to 25 percent of the purchase price | 3.8/5.0 | 4.9/5.0 |
| PayPal Pay in 4 | No interest charges or late fees | 4.2/5.0 | 4.5/5.0 |
| Perpay | No interest charges or late fees | 3.9/5.0 | 4.6/5.0 |
| Sezzle | No Interest Charges Rescheduled fees, payment failure fees, and convenience fees may apply. $10.00 reactivation fee if your account is disabled due to non-payment | 4.7/5.0 | 4.9/5.0 |
| Zip (formerly Quadpay) | Installment fee of $4.00 per order (or $1.00 per installment) Late fee of up to $7 | 4.6/5.0 | 4.9/5.0 |
To confirm
Affirm is a buy now, pay later option that skips late fees, making it a top choice for consumers. It is accepted for more than 102,000 retailers nationwide, and you can make interest-free purchases by selecting the four-installment payment plan. But if you choose the monthly payment option to get a longer repayment period and a credit limit of up to $17,500, your purchases may accrue interest. There is a benefit, however, as Affirm charges simple interest, which keeps your balance from growing over time.
Plus points
- Accessible online or via the mobile app (for personal purchases)
- No interest charges on purchases made with Affirm Pay in 4
- Build credit with monthly payment option
- No late payment penalties
Cons
- Interest may be charged on purchases made with the monthly payment option
- Late payments can negatively impact future approval chances
- Payments made through Affirm Pay in 4 cannot help you build your credit
Postpay
Afterpay is another ‘buy now, pay later’ app that lets you make purchases now, but pay in four interest-free installments in six weeks. It can be used for online purchases, or you can pay with the virtual card at participating retail locations. Additionally, you can change the due date of an upcoming payment without incurring any penalties. You can get started with Afterpay without affecting your credit score as the app only does a soft credit pull.
Plus points
- 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
Cons
- A late payment penalty of up to 25 percent of the purchase amount
- First payment required at point of sale
- Does not help build credit because on-time payments are not reported to the credit bureaus
PayPal Pay in 4
You can use PayPay Pay in 4 to split 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 due biweekly. There are no application fees or interest charges for this payment option, and no late fees.
Plus points
- No interest or late fees on purchases
- Accepted at millions of online retailers
- No hard credit check required
- Includes purchase protection to keep your data safe
Cons
- Only available in certain states
- Not accepted for in-store purchases
- Purchases limited to $1,500
Perpay
Perpay is a buy now, pay later app that gives consumers the best of both worlds: you can make everyday purchases and pay over time while building your credit. You can get approved with less than perfect credit because there is no credit check. The average user will see a 36 point increase when using the app, and payments are automatically deducted from your paycheck to make managing your account easier. Payment history is reported to the major credit bureaus to help improve your credit health.
Plus points
- No credit check
- Interest-free purchases, affordable over time
- Consumers with bad credit may qualify
- Access higher spending limits and more affordable payments over time
Cons
- Purchases must be made through Perpay’s marketplace
- Reimbursement limited to direct deposits through payroll
- Shipping delayed until receipt of first payment
Sezzle
Plus, Sezzle is an interest-free, buy now, pay later option. It’s quite flexible in that you can qualify for a generous credit limit of up to $2,500 and make four interest-free payments over six weeks. Plus, you get the luxury of rescheduling one payment per purchase for up to two weeks without incurring additional fees. You can also reschedule later payments to meet your needs, but you will be charged a fee for doing so.
Plus points
- Can be used online or in person at over 45,000 stores
- Soft credit check that doesn’t affect your credit score
- No interest charges or late fees
Cons
- 25 percent deposit required
- Up to $15 reactivation fee for disabled accounts
- You may be charged if payment is unsuccessful or a convenience fee is charged
Zip (formerly Quadpay)
Zip, formerly known as Quadpay, can be used online or in-store with a virtual card where Visa is accepted. You repay the amount owed in four installments spread over six weeks, with the first installment being payable at checkout. There’s no credit check when you sign up, and account activity won’t affect your credit score since Zip doesn’t report to the major credit bureaus.
Plus points
- Instant approvals
- No interest charges on purchase
- Good credit is not required
- No adverse credit reporting for late payments
Cons
- First payment at checkout
- An installment amount of up to $6 per order
- Late payment fees up to $7
Pros and cons of apps buy now, pay later
Be sure to evaluate the pros and cons of buy now, pay later apps before applying for a loan.
Plus points
Consumers often choose this payment method because of its convenience. You’ll find it easier to access than a credit card or personal loan, especially if you have bad credit. In addition, the application is relatively simple and you will know immediately whether you are approved, along with the terms of the payment plan. Another big advantage is that many apps don’t run a hard credit check (which could lower your credit score) when you sign up.
Cons
Despite their streamlined application process and clear payment plans, these apps have drawbacks worth considering. For starters, it’s easy to become overburdened if you spend too much and struggle to keep up with payments, potentially leading to late fees and adverse credit reporting. Some apps report on-time payments to the credit bureaus, but others do not. So your credit health may not reap the benefits even if you make on-time payments or pay off the loan early.
How to compare apps
When evaluating buy now, pay later apps, consider the following factors to find the best option:
- 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 fees or early repayment fees?
- Credit Reporting: Are on-time payments reported to the major credit bureaus to help you build credit? If not, are payment arrears reported?
- Interest rates: If applicable, are the interest rates comparable to or lower than what other Buy Now Pay Later apps charge?
- Refund Terms: How long are the refund periods? Do you pay back in equal installments and what is the frequency?
Alternatives to buy now, pay later apps
If you’d rather explore other ways to borrow money before purchasing a buy now, pay later app, here are some worth considering:
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Personal loan: This debt product gives you a longer repayment period and a cheaper monthly payment. However, you will likely pay much more interest. Also keep in mind that the longer the term of the loan, the higher the borrowing costs.
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0 percent interest credit card: You can make interest-free purchases during the promotional APR period, usually between 12 and 24 months. Make sure you pay the balance in full before it is due, otherwise interest will begin to accrue and be added to the outstanding balance.
In short
A buy now, pay later app can ease the financial stress when you need to make a purchase but don’t have the cash. The application process is often seamless; Once approved, you can immediately start making purchases.
Still, these apps are not without their drawbacks, so you should do your homework and compare the options before deciding which app to use or whether a financing alternative, such as a personal loan or a 0 percent interest credit card, would be a better fit.
