It’s easier than ever to get items and services you want now, and kick the bill down the line. Buy now, pay later plans have become popular payment methods over the past few years — but what are these plans and how do they work? As an alternative to high-interest credit cards, buy now, pay later apps offer a way to afford what you need now and repay the balance over time, usually within six to eight weeks.
BNPL apps may seem attractive, particularly as prices for everyday essentials continue to climb. These services let you split payments into installments to be repaid in weeks, months or years. Most BNPL apps charge zero fees for usage, though some may charge late fees or restrict the use of the app if installments are missed. Some BNPL plans charge interest, while others don’t.
While we recommend paying for items upfront, when possible, BNPL apps can be used to bridge the gap between paydays — just make sure you can afford to repay your balance in full to avoid penalties. If you’re interested in trying BNPL apps, here are our top picks. (Note that all of the starting annual percentage rates, or APRs, that are listed are based on a high credit score of 800 or above.)
Read more: Is Fuel Up Now and Pay Later the Answer to High Gas Prices?
Affirm
- Installment options: Split Pay (4 payments made biweekly over 6 or 8 weeks), biweekly and monthly terms
- APR: No interest for Split Pay. 0% to 30% for biweekly and monthly payment options
- Purchase limits: $50 to $17,500, maximum decided by credit score, payment history and ability to pay
- Fees: None
- Available merchants: Anywhere Visa is accepted
- Virtual card: Yes
- Amount due at purchase: Varies depending on loan
- Credit reporting: May conduct a soft credit inquiry upon joining. Larger, multimonth loans are reported to Experian
Affirm stands out among BNPL competitors for a few reasons. First, it offers a variety of payment options, allowing flexibility to pay loans back. Like other BNPL apps, it offers a Pay in 4 option, called Split Pay, which divides costs into four interest-free payments, paid every two weeks. Affirm’s version gives you the option of stretching the timeline to eight weeks, eliminating the need for an upfront payment.
Its biweekly and monthly payment plans range from six weeks to 60 months — a timeline that is far more flexible than other BNPL apps. Affirm also has a high purchase limit of $17,500 — but whether you qualify for this amount will depend on your credit score, payment history and ability to pay. Affirm also offers instant prequalification, allowing you to see up front what you’re likely to be approved for and how much it will cost you in interest (if interest applies).
Notably, Affirm lets you generate a virtual card, enabling you to shop at any virtual or in-person storefront that accepts Visa. It also, uniquely, offers a physical BNPL debit card.
Affirm’s interest rate maximum of 30% is definitely on the higher side, but it’s worth noting that BNPL apps charge simple interest, not compound interest, like credit cards. Compound interest is based on your loan amount and any interest that accrues, which can get quite expensive if you forget to pay your bill on time. Simple interest only accumulates on the loan itself. Affirm also lets you calculate how your interest will impact your total loan price, which is a plus. And it doesn’t charge late fees.
Klarna
- Installment options: Pay in 4 (4 payments over 6 weeks), Pay in 30 days and monthly financing
- APR: No interest for Pay in 4 or Pay in 30 days. 0% to 24.99% for monthly financing
- Purchase limits: Minimum of $10, maximum decided by payment history and outstanding balance
- Fees: Late fees of up to $7 per installment, capped at 25% of order value
- Available merchants: Over 400,000 participating retailers globally, including Nike, Sephora and Wayfair
- Amount due at purchase: For Pay in 4, quarter of total cost paid upfront
- Virtual card: Yes, but can only be used at participating merchants
- Credit reporting: May conduct a soft credit inquiry upon joining. Does not report to credit bureaus
Klarna is a user-friendly BNPL app that finances purchases three ways: Pay in 4, Pay in 30 and monthly financing. Pay in 4 allows you to divide costs into four interest-free payments, paid every two weeks, with the first installment due upfront. Through Pay in 30, you’ll receive a digital invoice for the full amount 30 days after your purchase, interest-free, without having to put down a payment upfront. Klarna’s Pay in 30 option is particularly notable, as it allows users without the funds to make an upfront payment access to a BNPL option. Monthly financing enables you to make larger purchases, paying back the amount due monthly for up to 36 months, albeit with an interest rate of up to 24.99% tacked on.
Klarna has over 400,000 retailers that will allow you to select the service at checkout, but you can also create a one-time virtual card to shop at online or in-person stores outside of this network. Klarna is also in the process of releasing a physical Visa card in the US, simplifying the in-person shopping experience and allowing customers to employ the Pay in 4 plan via card at checkout at any virtual or in-person store, regardless of partner status.
Sarah Tew/CNET
- Installments offered: 4 payments over 6 weeks
- APR: No interest
- Purchase limits: $30 to $1,500
- Fees: None
- Available merchants: Online merchants that accept Paypal
- Virtual card: No
- Amount due at purchase: Quarter of total cost paid upfront
- Credit reporting: May conduct a soft credit inquiry upon joining. Does not report to credit bureaus
PayPal’s Pay in 4 option allows users to divide a purchase into four interest-free installments over six weeks, with the first quarter-payment made at purchase. PayPal does not charge interest or late fees, making it a great no-fee option. This BNPL app does have a few limitations, however: Purchase limits are strict — between $30 and $1,500 — barring users from larger purchases. You can only use this method at retailers that accept PayPal though, but it’s worth noting that millions of retailers currently offer PayPal at checkout.
Afterpay
- Installments offered: 4 payments over 6 weeks
- APR: No interest
- Purchase limits: No minimum (though stores may impose a minimum limit), maximum decided by payment history, begins at $600
- Fees: Late fees ($10 for first late payment; $7 for each additional; capped at 25% of order value)
- Available merchants: Approximately 100,000 retailers globally, including Amazon, Target and CVS
- Virtual card: Yes, but can only be used at participating merchants
- Amount due at purchase: Quarter of total cost paid upfront
- Credit reporting: May conduct a soft credit inquiry upon joining. Does not report to credit bureaus
Afterpay places a strong emphasis on responsible spending, implementing strict measures on spending limits and late fees. Afterpay users have an initial spending limit of $600, which increases slowly with a responsible payment history. Afterpay also levels relatively steep late fees, charging $10 for a tardy payment on the first installment.
Afterpay offers only one payment option: Four interest-free payments over six weeks with the first installment due upfront. It also can be used at a relatively limited number of retailers when compared to other BNPL apps on this list. However, Afterpay offers great deals and offers on those retailers (50% on Adidas, anyone?) including a current promotion that gives you $10 for every friend you invite to Afterpay, for up to five people.
uplift
- Installments offered: Monthly payments
- APR: 0% to 36%
- Purchase limits: $300 to $15,000
- Fees: None
- Available merchants: 133 partners, including Carnival, United and more
- Virtual card: No
- Amount due at purchase: Varies depending on loan
- Credit reporting: Will conduct a soft credit inquiry upon joining, reports information to credit bureaus.
Uplift is a BNPL website — not app — that offers fixed-rate loans for travel purposes that can be paid back in monthly installments. Like other book now, pay later services, Uplift loans charge simple and not compound interest. Loan terms are decided based on a number of factors, including credit information and purchase details, and cannot be refinanced.
The Uplift refund process can be painful, so make sure you’re committed to your trip before taking out a travel loan. If you have great credit, Uplift may be a good option to beat high credit card APRs (but you’ll be sacrificing points and miles you could earn from travel or airline credit cards). However, keep in mind that Uplift can be used at a pretty limited number — 133 — of travel companies that exclude some of the big names.
Best BNPL lenders compared
| BNPL Service | Affirm | Klarna | PayPal Pay in 4 | Afterpay | Uplift |
|---|---|---|---|---|---|
| Best for | Overall | No upfront payments | No fees | Spending responsibly | Travel loans |
| Terms/installments | 4 biweekly payments; biweekly and monthly payments | 4 biweekly payments; pay in 30 days; pay over 6 to 24 months | 4 biweekly payments | 4 biweekly payments | Monthly payments |
| APR | 0% to 30% | 0% to 24.99% | 0% | 0% | 0% to 36% |
| Purchase limits | $50 to $17,500, max decided by credit score, payment history and ability to pay | Min of $10, max decided by payment history and outstanding balance | $30 to $1,500 | Stores may set mins, max decided by payment history, begins at $600 | $300 to $15,000 |
| Late fees | None | Up to $7 per late payment (capped at 25% of order) | None | $10 for first late payment and $7 for each additional. Capped at 25% of order | None |
| Available merchants | Anywhere Visa is accepted | Over 400,000 global retailers | Millions of global retailers | Around 100,000 global retailers | 133 travel company partners |
| Virtual card | Yes | Yes, at named merchants | No | Yes, at named merchants | No |
| Option to defer upfront payment | Yes | Yes | No | No | Yes |
| Credit impact | Multimonth loans are reported to Experian | Does not report to credit bureaus | Does not report to credit bureaus | Does not report to credit bureaus | Does report to credit bureaus |
FAQs
Buy now, pay later plans are microinstallment loans that allow you to buy items or services now, and repay the balance over time. Most BNPL services do not require hard credit checks and have more flexible repayment options than credit cards.
BNPL apps work differently depending on the service and installment plan chosen. Many offer a Pay in 4 installment system, through which you can split the cost of a good into four different installments over a period of six weeks, with the first installment due upfront — and the majority of Pay in 4 plans don’t charge interest. Others offer monthly installment plans, with interest rates that usually lie between 10% and 30%. Some BNPL apps can be used at any online or in-person store via virtual or physical cards, while others can only be used at select vendors. Many BNPL apps partner with select stores and brands to offer discounts on goods purchased via the BNPL app.
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