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Afterpay review: Everything you need to know about this short-term 'buy now, pay later' option

'Buy now, pay later' provider Afterpay has 0% interest on loans but hefty late fees that could add up for consumers.

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You've probably been on the website of your favorite retailer and noticed the option to split your purchase up into payments made every two weeks. If you've ever been tempted to buy an item that you can't afford upfront, 'buy now, pay later' is meant to be an alternative to credit cards. 

There are a number of different BNPL providers but Afterpay, Klarna and Affirm are some of the most popular ones. 

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Afterpay is an Australia-based BNPL provider that has taken American consumers by storm: At the end of June 2021, Afterpay had more than 16 million customers and was available at nearly 100,000 merchants globally, including popular retailers like Target, lululemon, ASOS and Nike. In August 2021, it was acquired by Square for $29 billion, a sign its growing popularity.

If you're considering using Afterpay to finance your new clothing or home goods, Select walks you through how to use it, whether it impacts your credit score and its late fees. 


  • Interest rates


  • Loan terms

    Afterpay only offers 1 loan option: Customers can make 4 installment payments over 6 weeks. You have to make one down payment (typically 25% of the order), and then a payment once every two weeks.

  • Fees

    Afterpay does charge late fees: $8 or 25% of the transaction, whichever is less.

  • Return policy

    In order to return items, you'll have to go through the merchant first. Since you don't pay interest on your Afterpay loan, you don't have to worry about not being refunded for interest. Afterpay also offers partial refunds on orders. However, you will still be on the hook for payments until the merchant has accepted and processed the return.

  • Available merchants

    Approximately 100,000 merchants globally. Consumers can also use the Afterpay Card to pay for purchases in store. However, this is only available for some customers to use at select retailers such as Amazon, CVS, Target, Nordstrom and Macy's.

  • Loan amount

    The amount of credit you can access depends on how long you've been an Afterpay customer and on whether you're making your payments on time and in full. A new user will be able to spend less than someone with a longer history. The more you use Afterpay, the more you can spend with it.


  • 0% interest on all credit options
  • Doesn't perform a credit check
  • Doesn't report to the credit bureaus so it won't affect your credit score


  • There's a $8 fee for each late installment payment
  • Consumers are unlikely get approved for higher credit limit until you've been a repeat customer

How does Afterpay work?

Consumers can use Afterpay either through the app, the website or directly through the merchant. The Afterpay app is available in the Google Play Store and the App Store.

You can use Afterpay either online or in-store. If you're shopping online, you can use Afterpay at whatever retailer you want, regardless of whether it's a payment option offered at checkout. If it's not offered on the retailer's site, you can use the virtual Afterpay card via Afterpay's app for a card number to input at checkout.

Similarly, if you're shopping in-person, you can download the app, and it will generate a virtual Afterpay card that you can use in-store. 

APR and fees

Afterpay offers just one product: a six-week financing option with payments due bi-weekly after you (typically) make a down payment. Since it's a short-term financing option, Afterpay's average order value is quite low, only $155

One major benefit of using Afterpay is you don't have to pay any interest when using the service. However, if you're late with your payments, you could incur a late fee. 

"If a customer misses a payment, he or she is charged a $8 fee or 25% of the transaction — whichever is less. And then they cannot use our platform until the payment is made," says Amanda Pires, vice president of communications at Afterpay.

Customers can reschedule one payment per order if they want to avoid late fees. If you can't make either your second or third payments on-time, customers can reschedule them for a few days later, but they must reschedule their payments within 24 hours of the due date.

How to apply for a loan

Afterpay doesn't perform a credit check when approving consumers. Rather, it uses a proprietary risk model to assess customers, including looking at the value of the order (a lower order value may be more likely to be approved), the amount of funds you have on your debit or credit card, and the length of time you've been using Afterpay.

You have to share your email, phone number, address, date of birth and a debit or credit card when requesting approval for an order.

Payment methods

Consumers can either use a debit card or credit card to pay for their purchases with Afterpay. Around 90% of Afterpay customers use a debit card to fund their purchases, according to an Afterpay spokesperson. 

Afterpay has an autopay option, so the provider will take the money from your card on the installment due date so you don't have to stress about missing an payment and getting dinged with a late fee.

You will, however, want to make sure there's enough money in your checking account if you're paying by debit card — if you can't make one of your installment payments you don't want to be hit by late fees from Afterpay and overdraft fees from your bank, which can be up to $35.

Loan amount

There's no strict limit on the amount you can take out with Afterpay: It depends on your payment history with the provider and the limitations of the merchant. With Afterpay, the more frequently you make your payments on time, the more money you can spend with the service.

Afterpay considers a variety of different factors when determining how much customers can spend, including whether scheduled payments were declined, the frequency of late payments and how late a payment was made.

Impact on credit score

Afterpay has no effect on your credit score. The BNPL provider does not report any information to the credit bureaus and does not perform any credit checks.


In order to return an item that you purchased through Afterpay, you have to contact the merchant. You'll also have to keep on making payments on your purchases until the return has been processed by the merchant. However, consumers can delay payments by contacting Afterpay.

If you purchase a faulty item or have an issue with the quality of the good and are not able to resolve the issue with the merchant, you'll have to contact your credit or debit card issuer to get your refund.

Since Afterpay only allows consumers to pay with credit or debit card (rather than linking directly to a bank account), consumers can enjoy the same protections they have when they used their payment cards directly at the retailer, says Pires.

Bottom line

Afterpay is an easy way to finance your smaller ticket items. Since there are no credit checks, no reporting to credit agencies and no interest, this BNPL provider is a solid option for people who are sure they can make their payments on time and avoid late fees.

If you're worried about the quality of the items you're going to receive or the reliability of the merchant, you should probably opt to use a credit card instead as cards like The Blue Cash Preferred® Card from American Express, which has have benefits like return and purchase protection. With this card, you also have the chance to earn cash back on eligible purchases.

Blue Cash Preferred® Card from American Express

On the American Express secure site
  • Rewards

    6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations, 3% cash back on transit (including taxis/rideshare, parking, tolls, trains, buses and more) and 1% cash back on other purchases. Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.

  • Welcome bonus

    Earn a $250 statement credit after you spend $3,000 in purchases on your new card within the first 6 months. 

  • Annual fee

    $0 intro annual fee for the first year, then $95.

  • Intro APR

    0% for 12 months on purchases from the date of account opening

  • Regular APR

    19.24% - 29.99% variable. Variable APRs will not exceed 29.99%.

  • Balance transfer fee

    Either $5 or 3% of the amount of each transfer, whichever is greater.

  • Foreign transaction fee


  • Credit needed


See rates and fees, terms apply.


Catch up on Select's in-depth coverage of personal financetech and toolswellness and more, and follow us on FacebookInstagram and Twitter to stay up to date.

For rates and fees for The Blue Cash Preferred® Card from American Express, click here

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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