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Published: Aug 16, 2023 24 min read

Buy Now, Pay Later (BNPL) apps allow you to finance your items instead of paying the full price upfront. These services help you divide the cost of your purchases into more manageable installments.

The most popular BNPL option is a four-installment plan that typically charges no interest. However, BNPL apps also offer longer plans meant for larger purchases, with added interest charges similar to credit cards or loans.

Whether you're unfamiliar with this service or want to learn more about the services you’re already using, read on to see how these services work and what the best Buy Now, Pay Later apps have to offer.

Money’s Top Picks for Best Buy Now, Pay Later Apps of 2023

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Best Buy Now, Pay Later Apps Reviews

Pros
  • No late fees or origination fee for monthly payments loan
  • App rated 4.9 in Apple App store and a 3.9 in Google Play store
  • Provides virtual card to pay in stores
Cons
  • Charges late fees for installment plans (up to 25% of order value)
  • Monthly payments loan not available in WV, NM, NV and HI
HIGHLIGHTS
Installments
Pay in 4 (equal payments over 6 weeks) or monthly payments (6 and 12 months)
Interest rate range
0%-35.99%
Minimum purchase
$35
Financing partner
First Electronic Bank

Why we chose it: Afterpay has a rewards program where customers can use points to get discounts, delay payment date up to 7 days and buy gift cards from some brands.

Afterpay offers two types of Buy now, Pay later financing. The first is Pay in 4, where customers pay the first installment at checkout and another three every two weeks until they pay in full. Pay in 4 doesn’t charge finance fees or interest, but customers can incur late fees. These late fees won’t exceed $8 per missed payment, but the total amount of late fees charged can go as high as 25% of the order value.

Afterpay’s other BNPL option is a six- or 12-month loan, to be paid monthly, for purchases over $400. This option does charge interest and the rate will depend on a soft credit inquiry (an inquiry that doesn’t impact your credit). For return customers, Afterpay will also look at payment history to set interest rates.

Note that Afterpay may report past due payments to credit bureaus which might affect your credit negatively.

Afterpay also stands out for its virtual cards, which are available in both Apple Wallet or Google Wallet and can be used to pay in stores.

Finally, while most App Store reviews are generally positive, Google Play store reviews reflect a pattern of Android users experiencing issues with the app since the July 31st, 2023 update.

Pros
  • Affirm card and virtual card to pay in stores
  • Caps interest at 6% for active members of the military Offers a high-yields savings account with a variable APY
Cons
  • Maximum APR of 36% is the highest on our list
  • Doesn't allow customers to reschedule payments
HIGHLIGHTS
Installments
Pay in 4 or monthly (3, 6 or 12 months)
Interest rate range
0% - 36%
Minimum purchase
$50
Financing partner
Cross River Bank, Celtic Bank

Why we chose it: Affirm doesn’t charge late fees, pre-repayment fees, annual fees or account open or close fees.

Like most Buy Now, Pay Later apps, Affirm offers two payment options: pay in four installments or monthly. Unlike other BNPLs, Affirm doesn’t charge late fees for either payment plan. However, its Monthly plan does charge interest, which can range from 0% to 36%, the latter being the highest on our list.

Each customer’s rate will depend on a soft credit check, order amount, shopping location and the repayment terms chosen — three, six or 12 months. While a soft check won’t affect a person’s credit score, Affirm does report some loans (including loans with delinquent payments) to Experian which may hurt your credit score.

Affirm also offers three other products. The first is a high yield savings account with no minimums and no fees. The second is a virtual card to make online or in-person purchases that users must apply for right on the app as each card can only be used once.

Lastly, customers can apply for an Affirm Card to make everyday purchases. To use it, customers must link it to their bank account; they can then use it as a debit card to pay for items in full or to finance large purchases. For the latter, users can request a payment plan for a purchase before buying or up to 24 hours after the purchase.

Pros
  • 24/7 customer support via chat or phone
  • Has a web page with all legal agreements for Klarna services
  • Four different payment options
Cons
  • Charges late fees up to $7
  • May run a hard credit inquiry for long-term financing
HIGHLIGHTS
Installments
Pay in 4, pay in 30 days or pay monthly (6 to 24 months)
Interest rate range
0%-29.99%
Minimum purchase
$35
Financing partner
WebBank

Why we chose it: Klarna is best for its variety of financing options because it has four types of repayment options unlike most competitors, who only offer one or two.

Klarna differs from other BNPLs because it offers four types of repayment options. It has the ubiquitous Pay in 4 short-term loan with 0% interest, as well as monthly payment plans that range from six to 24 months.

The other payment options available are Pay Now (yes, you read that correctly) and Pay in 30. The first lets customers link their debit or credit cards to pay for items through the Klarna app. If you enjoy using the Klarna app then you might like this, otherwise, this is just a perk.

Pay in 30 is the stand out as no other company on our list offers it. This interest-free option lets customers place online orders with retailers. Once the retailers ship out the product Klarna sends the customer an invoice. Then, customers have 30 days to decide if they want to keep or return the item before paying

Like other BNPL apps, Klarna’s pay-in-four option only requires a soft credit check before approval, however, its site notes that the monthly financing option might require a hard credit check. A notable highlight of Klarna’s services is that its customer service is available 24/7 via phone and live chat, something not all BNPL companies provide.

Pros
  • No late fees
  • Offers PayPal's purchase protection for eligible purchases
  • Can use with any brand or retailer that already offers PayPal at checkout
Cons
  • Not available in stores
  • Not yet available nationwide
  • No rewards
  • Pay in 4 max purchase amount is $1,500
HIGHLIGHTS
Installments
Pay in 4 or monthly (6, 12 or 24 months)
Interest rate range
9.99% - 29.99%
Minimum purchase
Pay in four - $30; Monthly $199
Financing partner
WebBank

Why we chose it: We selected PayPal Pay Later because its interface is easy to use, especially for customers who’ve used PayPal for years.

PayPal’s Pay Later, like others, has a pay-in-four plan with a 0% interest rate. Customers can use this option for purchases between $30 and $1,500, making it a good choice for small or mid-sized purchases.

PayPal also offers a monthly installment plan for purchases from $199 to $10,000. This financing option includes interest which ranges from 9.99% to 29.99%. As with other BNPLs, PayPal customers must undergo a soft credit check to determine the interest rate they’ll get for each purchase. You can pay for this plan with debit cards and a confirmed bank account, but not credit cards.

It’s important to note that PayPal Pay Later is still not available in all 50 states. Pay in 4 is not available yet for Missouri Nevada or New Mexico residents. Additionally, Pay Monthly is not yet available to residents of Arkansas, Colorado, Hawaii, Massachusetts, Nevada, New York or Texas.

Pros
  • Built into Apple Wallet
  • No interest or fees
Cons
  • No longer-term monthly payments option
  • No rewards
  • Users can't change payment dates
HIGHLIGHTS
Installments
Pay in 4
Interest rate range
0%
Minimum purchase
$50
Financing partner
Goldman Sachs

Why we chose it: Apple’s Pay Later made our list because it’s a great option for Apple fans or iPhone owners who’d rather keep all payments within Apple’s suite of apps.

Although not an app,Apple Pay Later still makes our list as it’s integrated into Apple Wallet. With this service, users can apply, use and manage their loans in the Apple Wallet app, making it particularly appealing for iPhone users.

Apple Pay Later offers a pay-in-four option with 0% interest and no fees. This differs from other BNPLs that usually charge late fees for their pay-in-four plans. However, customers should note that they must link a debit card for this payment option. So, Apple will automatically withdraw the amount on due dates and customers will have to pay any bank overdraft fees.

While Apple Pay Later customers can opt out of automatic payments, they can’t change the payment dates. If you miss a payment or the account is past due, Apple will freeze your account. Apple may also report past due payments along with loan and payment history to credit bureaus which can impact your credit score.

Unfortunately, Apple doesn't offer a monthly installment option to break up the cost of large purchases.

Brand partnerships:

  • Accepted wherever Apple Pay is a payment option.

Pros
  • Offers credit-building option (Sezzle Up)
  • Pay-in-two option with 0% interest
  • The longest monthly loan term (48 months) option on our list
Cons
  • Not as widely accepted
  • Charges a reactivation fee if you miss a payment (after 48 hours)
  • Charges convenience fee for paying with a prepaid, debit or credit card
HIGHLIGHTS
Installments
Pay in 2, pay in 4 and pay monthly (3 - 48 months)
Interest rate range
5.99% - 34.99%
Minimum purchase
$20
Financing partner
Ally Bank, Bread FinancialTM

Why we chose it: Sezzle is the only provider that gives customers the option of reporting their payment history to credit bureaus, which can help them build credit (if customers pay on time).

Sezzle users can choose between three payment options: Pay in 2, Pay in 4 and Pay Monthly. Both Pay in 2 and Pay in 4 charge 0% interest, while Pay Monthly’s interest can vary between 5.99% and 34.99%.

With Pay in 2, customers pay 50% at the time of purchase and the other 50% the following week. Its pay-in-four option works the same as all other providers: 25% at purchase as down payment and the other three payments paid every other week over six weeks. The last option, Pay Monthly, can be split into three to 48 months and approval for loan amounts will depend on Sezzle’s banking partners.

Sezzle stands out for its upgrade, Sezzle Up, where customers can choose to report their payment history to Equifax, Experian and TransUnion. This is the only provider in our list with an opt-in option for credit reporting. If you make on-time payments, not only will you increase your spending limit, but your history will help build (or repair) your credit.

Customers can upgrade by paying off an order on time, linking their bank account or debit card (as the default for scheduled payments) and providing a valid SSN to confirm their personal information.

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Other Buy Now, Pay Later Apps we considered

Zip

Pros
  • Pay in 4 can be used anywhere Visa is accepted
  • Doesn't freeze your account if you miss a payment
Cons
  • Charges late fees
  • Charges a $1 convenience fee for each payment
  • Doesn't let customers opt out of automatic payments
HIGHLIGHTS
Installments
Pay in 2, pay in 4 and pay monthly (3 - 48 months)
Interest rate range
Undisclosed
Minimum purchase
$35
Financing partner
WebBank

Zip (previously Quadpay) has a pay-in-four option along with monthly installment plans that range from three to 50 months. Depending on where you shop, customers get a three-month period where they don’t have to pay interest, something no other provider offers.

Why Zip didn’t make our list: Zip doesn’t allow users to turn off auto pay and charges a late fee, meaning you may get charged a late fee and bank overdraft fees if a payment doesn’t go through.

Buy Now, Pay Later Apps Guide

What is Buy Now, Pay Later?

Buy Now, Pay Later (BNPL) are short-term financing options that allow consumers to make purchases and spread the cost over time through installment payments.

The payment plans BNPL companies provide typically include a pay-in-four option that divides the cost into four equal payments over a six-week period, or monthly installments that range from three to 24 months. Some providers, however, offer repayment periods as long as 48 months.

What makes Buy Now, Pay Later different from other payment options are its interest rates which range from 0% for pay-in-four options and up to 36% for monthly installments.

MostBNPLs don’t require a hard credit inquiry; instead, you’ll be subject to a soft credit check (which doesn’t show on your credit) to determine creditworthiness. The lender will then set interest rates and spending limits accordingly. Once a customer makes a purchase, providers will use the payment history to establish interest rates and the spending limits for future purchases.

These services are usually accessible through websites and/or mobile apps. Some providers even offer browser extensions that simplify the process of using a BNPL for online purchases or virtual cards that customers can add to their digital wallet and use to pay in stores.

How does Buy Now, Pay Later work?

When you choose Buy Now, Pay Later as your payment option, the first step is to provide your personal information to apply for the service. Using this information, the lender will run a soft credit inquiry to determine eligibility. (It will also evaluate purchase and payment history with the provider if you’re a return customer.)

If you’re deemed eligible t, providers will present your repayment options along with their respective interest rates (if applicable). You can then select which repayment option you want knowing exactly how much you’ll have to pay for each installment.

It’s important to keep in mind that, just like with credit lines or loans, failing to make a payment will result in late fees. Some providers will freeze your account until you pay your balance. Also note, that although providers don’t yet report all accounts to the major credit reporting agencies, they will likely report missed or defaulted payments which will affect your credit score negatively.

What is the difference between Buy Now, Pay Later apps and credit cards

Buy Now, Pay Later apps and credit cards are similar in that they allow customers to buy items without having to pay the full price at the point of purchase. Both products offer the convenience of deferring costs and flexible payment options. Additionally, both BNPL apps and credit cards include finance charges such as interests and fees.

However, there are some important differences to note as well.

BNPL (Loan) Credit Cards
Credit check Soft inquiry (does not impact your credit, not part of a formal application for credit) Hard inquiry (can impact your credit, involves thorough check of your credit history.)
Credit report impact BNPLs generally report to credit bureaus when you miss payments or default on your loan. This means that they don’t help you build credit (if you always pay on time), but they can have a negative impact if you miss payments. Credit card providers report your activity, both positive and negative, to credit bureaus.
Interest rate Varies by individual (based on a soft credit check and payment history with the provider), purchase amount and repayment terms. (Pay in 4 installments plans usually offer 0%) Interest rates are usually variable and high. These range from 10.24% to 27.49%, with the average rate recently hitting a record high of 20.69%
Consumer protection Little to no consumer protection regulation due to newness of the product. Extensive as a result of the Credit Card Accountability Responsibility and Disclosure (CARD) Act which established fair and transparent practices.
Payment terms Four installments (the first payment at checkout and three others every two weeks for six weeks) or monthly payments up to 48 months An open line of credit with a monthly billing cycle where you must pay a minimum amount every month or incur fees.
Spend amount Varies by individual Established maximum credit limit
Fees Service charges (some paid per installment) and late fees. Some also charge loan origination fees, transaction fees or account reactivation fees. Most cards charge late payment penalties of $15 to $35; some charge annual and foreign transaction fees.

Best Buy Now, Pay Later apps pros and cons

The main pro of Buy Now, Pay Later apps is the flexibility of splitting the cost of purchases into smaller installments. This can be especially helpful in emergencies when you need to buy something but don't have the cash or a credit card to pay upfront.

However, these programs can also be risky because of the potential for increased spending and accumulating debt. The flexibility and convenience of BNPL may lead to impulsive purchases or exceed their budgets. This in addition to other cons such as:

  • High interest rates for monthly installment loans
  • Late fees and other penalties that increase the price of each purchase
  • Lack of federal regulation meaning there are less consumer protection rules in place to protect users

How does Buy Now, Pay Later impact your credit score?

While most BNPL lenders don’t report your payment history to the credit bureaus if you’re making on-time payments — one of the few exceptions being Sezzle’s credit-builder plan — they will report any missed installments or defaults. In other words, these programs will not help you build credit but might, in fact, hurt your score if you were to miss payments.

Buy Now, Pay Later services can impact your credit as well if you apply for an installment loan for a large purchase. This type of financing may involve a hard credit inquiry, which can slightly lower your score, because providers partner with traditional banking institutions to underwrite these loans.

As for credit checks, BNPL loan providers will generally perform a soft credit inquiry. These soft credit checks are typically done to see if you qualify for credit and do not involve a thorough assessment of your finances. While you might see these inquiries noted in your credit report, they do not impact your score as they are not considered a formal application for credit.

To avoid a negative impact on your credit score, make sure you make all your payments on time. We also recommend you read the loan agreement carefully before accepting to learn if and when providers will report your account to credit bureaus.

Who uses Buy Now, Pay Later the most?

The largest share of users tend to be Millennials and Gen Zers. Often these customers use BNPLs to purchase clothing, electronics or sporting equipment.

BNPLs are also appealing for individuals without credit history, with low credit scores or people who are already indebted because most BNPL options only require a soft credit check. However, a soft check will let lenders know if someone has a short credit history, low score or several loans to their name, which can result in providers only offering these customers some of the highest borrowing interest rates in the industry.

Who are Buy Now, Pay Later Apps best suited for?

Buy Now, Pay Later are best suited for people who don’t have a lot of debt and prefer the convenience of the apps over traditional payment methods. It’s also a convenient option if you have an emergency purchase to make and no other way to pay for it.

However, while this convenience is appealing, BNPL apps can be a risky financing option as they can lead to impulse buys, multiple outstanding balances that can be hard to track and the risk of damaging your credit score. As we said above, while most of these services don’t help you build credit, missing a payment could damage your score. It’s important to read the terms and conditions carefully and create a plan to make all your payments on time.

In these cases,

Buy Now, Pay Later Alternatives

If you’re looking for ways to improve your credit score because you’re finding it difficult to get approved for a new card, it’s important to note that there are credit cards available specifically for applicants with poor credit. One option is a secure credit card which requires a cash deposit equal to the credit limit.

Check out our picks of the best loans for bad credit as these are also a good option while you improve your credit score.

If you have a short or no credit history and are currently enrolled in college, student credit cards are good options. These are often more accessible, even for those with no credit history. Additionally, they only require people to show proof of a stable income and college or university enrollment. If you’re interested, read our list of the best student credit cards.

Another option that helps build your credit are credit-builder loans. Unlike traditional loans, with a credit-builder loan, the lender deposits your money into a savings account or certificate of deposit as collateral. You won't receive this money until you’ve paid the loan.

How to choose the Best Buy Now, Pay Later app for you

There are several factors you should consider and compare before choosing the best Buy Now, Pay Later app for you. The main ones are the payment options, interest rates and fees.

Interest Rates and Fees

These can help you decide if the convenience of the BNPL is worth the cost. Choose a BNPL that offers you a low interest rate, carefully noting additional fees, such as late payment fees or processing fees, as these can increase the overall cost.

Eligibility Requirements

Research the criteria providers use to determine eligibility. Some payment plans require a hard credit check, while others don’t, making it easier to get approved. Knowing these criteria will help you decide if a provider is the right fit for you.

Payment Schedule and Flexibility

Look at the payment plans available and how flexible these are. Find out if you can choose shorter or longer repayment periods based on your financial situation. You should also consider whether the BNPL allows additional payments or early repayment without penalties, giving you more control over your repayment schedule.

Customer Reviews and Ratings

Read customer reviews from past users. Focus on overall satisfaction and customer support to learn how the app works overall and how the provider helps customers when they run into problems. Check the rating from the Better Business Bureau and reputation of the BNPL you’re considering to ensure you select a trusted and reliable provider.

Best Buy Now, Pay Later apps FAQs

Can you build credit with Buy Now, Pay Later apps?

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Generally, no. Only Sezzle lets customers choose to report their payment history to the major credit bureaus and therefore build credit. Given BNPLs are a relatively new financial product, there's no regulation surrounding it and providers are not required to report customer history to credit bureaus.

This means that, even if you make all your payments on time, there's no guarantee that companies will report this good standing to credit bureaus. However, companies will report late or past due payments to credit bureaus which can affect your credit negatively.

What happens if I miss a payment with BNPL?

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If you miss a payment you could get charged late fees that vary depending on the provider and type of installment program. Some providers will also freeze your account so you can't make new purchases, and many will report past due payments to credit bureaus which can affect your credit score.

Can I use Buy Now, Pay Later in physical stores?

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Yes. Many providers offer a virtual card that you can add to your digital wallet (Apple Wallet or Google Pay) so you can pay in stores. Some providers, like Affirm, even allow users to get prequalified for a purchase so they know if they're eligible before making it.

Are there any hidden fees with BNPL apps?

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Not generally. Most, if not all, providers market themselves as predictable payment options as opposed to credit cards. Users will see a breakdown of their payment plans before purchase so they know exactly how much they have to pay and when. There are, however, providers who charge fees that don't appear in the cost breakdown, such as late fees or account reactivation fees. To know the fees your provider charges, we recommend you read the loan agreement carefully.

Is Buy Now, Pay Later a good idea for managing finances?

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Providers make it easy to see and track your loans in the app. However, remember that each purchase will be its own individual loan, so the more loans you take on, the more payments you'll have to keep track of.

Summary of Money’s Best Buy Now, Pay Later Apps of 2023