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When you're ready to purchase a new coat from Neiman Marcus or a new iPhone from Apple, you have the option of financing the cost of your order over time with buy now, pay later. BNPL, also known as point-of-sale loans, is kind of like a modern-day layaway option: Consumers can buy items online or in-store, and then split up the cost of a purchase over a few weeks or a few months with regular installment payments rather than pay for the entire purchase up front.
There are many BNPL providers that have emerged in the past few years, and consumers are increasingly flocking to them to finance everything from clothing to travel to workout equipment. As long as you make your payments on time, BNPL services can also help you build credit.
With so many buy now, pay later options available to consumers, which provider is best? And for who? When compiling this round-up of popular BNPL options, CNBC Select looked at factors like APR, late fees, available merchants, whether a credit check is performed and if the provider reports to the credit bureaus to help you determine which provider is best for you. (See our methodology for more info on how we reviewed each POS loan.)
0% to 36%
One to 48 months
There are no late fees, but making late payments can affect your ability to get a loan in the future and possibly your credit score.
Customers are only refunded the principal amount, so if you don't have a 0% loan, you won't be refunded for the interest you paid before making the return.
Affirm has more than 245,000 merchants including Amazon, Peloton, adidas and Target. Through affirm.com or the Affirm app, consumers are also able to use the BNPL option at any retailer, either online or in-store, that aren't integrated with the company. Consumers will receive a single-use virtual card to pay for their purchases.
Up to $25,000 on a purchase.
Who's this for? Affirm is a good choice if you need a longer-term financing option with a 0% APR and no late fees. It offers POS loans ranging from one to 60 months with a limit of $25,000 per loan. Affirm is one of the few buy now, pay later providers that offer consumers long-term financing options with a 0% APR.
However, the interest rate that you manage to secure on your loan depends on a variety of factors — including the purchase amount, length of payment term and the merchant — so you could end up with an APR as high as 36%.
If you manage to secure a 0% loan, you also don't have to worry about late fees, which is rare. However, if you're late with payments, you might not able to get a loan from Affirm in the future, and it could potentially affect your credit score.
Affirm uses a soft credit check when approving consumers for loans. It also reports some loans to the credit bureau Experian. It doesn't report 0% four-biweekly payment loans or 0% loans with a three-month repayment period. Your payment history, how much credit you've used, late payments and how long you've had the credit line open can affect your credit score.
Affirm is a good choice because of its widespread availability: You can essentially use it on any purchase anywhere by using the Affirm website or the app. In addition to the hundreds of thousands of merchants that partner with Affirm, consumers are able to use the BNPL option at any retailer, either online or in-store, that aren't integrated with the company through Affirm's website or mobile app. Consumers will receive a single-use virtual card through the website or the app to pay for their purchases wherever they want.
While the Better Business Bureau gives Affirm an A- rating (you can read more about the BBB rating process here), customer reviews are not so good. It has a 1.16/5 average rating based on over 700 customer reviews on the BBB website at the time of writing. The customer complaints range from not being able to get ahold of customer service to not being able to obtain a refund.
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.
Afterpay does charge late fees: $8 or 25% of the transaction, whichever is less.
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.
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.
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.
Who's this for? Afterpay doesn't consider itself a POS loan provider because it doesn't charge interest on its loans, but it is commonly referred to as a buy now, pay later provider so we've included them in this round-up.
Afterpay is best for people who can make their payments on time, need a short-term financing option with 0% interest and don't want the loan to affect their credit score.
The company offers one product: a financing option with four installment payments due every two weeks over a six-week term. You make one down payment at the time of purchase (typically 25% of the order) and then pay the rest over six weeks.
There isn't a limit on how much credit you can take out with Afterpay. Your credit limit depends on how long you've been an Afterpay customer, and whether you're making your payments on time and in full. A new user will likely have a lower limit than someone with a long history, so if it's your first time using Afterpay, you might have to stick with purchasing smaller-ticket items. The average Afterpay order is only $150.
One major advantage of using Afterpay, over other POS providers, is that it doesn't affect your credit score at all — the company doesn't check your credit score, and it doesn't report any loan information to the credit bureaus.
A major drawback of using Afterpay are the late fees. You'll be hit with an $8 fee, or 25% of your transaction, whichever is less, for each late payment. If you fail to make a payment, you won't have access to the platform to take out a new loan until you make a payment.
When it comes to availability, Afterpay can be used at more than 100,000 merchants around the world including American Eagle, Bed Bath and Beyond and lululemon. Afterpay also offers some consumers the ability to use the app to make purchases at select retailers such as Nike, Kroger, Amazon and Macy's. Whenever you use the app, you'll be given a one-time virtual card.
Much like the other POS providers in this round-up, Afterpay has poor customer service reviews on the Better Business Bureau website. It had a 1.17/5 average rating based on 398 customer reviews at the time of writing. Many of the customer complaints focused on canceled orders from the merchant or failure to receive a refund from Afterpay. BBB gives Afterpay a B rating based on its own rating system.
Length of loans offered
Sezzle has one short-term product which is 4 installments over 6 weeks. If you take advantage of the free reschedule of one of your payments, you can technically pay over 8 weeks.
Sezzle doesn't technically charge late fees but they will charge you if your payment fails or if one of your payments is rescheduled. Failed payment fees are typically $10 but it depends on state regulations.
You're allowed to reschedule one payment per order for free. Reschedule fees are $5 but they also depend on state regulations.
The merchant must first send the refund to Sezzle. After Sezzle has processed it, your future payments will be cancelled and your past payments will be refunded to the original payment method.
Sezzle has 41,800 active merchants such as Target and GameStop.
The value limit is $2500 per order.
Who's this for? Sezzle, a Minneapolis-based buy now, pay later provider, is best for people who want a short-term loan, no interest, no reporting to the credit bureaus and flexible payment dates. It's one of the few BNPL providers that allow customers to reschedule one payment per purchase.
Sezzle offers short-term and long-term financing options. Its short-term financing option is a six-week loan where consumers make a down payment and bi-weekly installment payments on purchases up to $2,500. If you choose to reschedule a payment, you could pay off your loan over two months.
The long-term financing option, known as Sezzle + Ally, allows consumers to finance purchases worth up to $40,000 with a loan length of up to 60 months (your payments are monthly with this option). However, you may have to pay interest for this option.
While Sezzle technically doesn't charge late fees, you will get charged 'failed payment' fees if your card is expired or you have insufficient funds on your debit card or in your bank account. This fee can be up to $10, but it depends on state regulations.
Sezzle has over 40,000 partner merchants, but it's not connected with as many well-known or popular retailers as other BNPL providers. You can use the service both in-person and online, but you're limited to using it at partner merchants. You just sign up for Sezzle virtual card through the app and then add it to your Google Pay or Apple Pay and use it at checkout like you would any other virtual card.
Sezzle only has a few reviews on BBB but they're mostly negative. They have a 1.21/5 average rating based on 110 customer reviews at the time of writing. BBB gives it an A+ rating based on its own rating system, and it is not accredited.
4 interest‑free installment payments over 6 weeks
Zip installment fees are $4 for purchases from $35 to $99.99, $5 for purchases from $100 to $199.99, and $6 for purchases $200 and above.
Zip will charge a $7 late fee for each late installment payment (this amount may vary by statute and state). If a customer is one day late with their payment, or if a customer has a delayed paycheck, Zip may be willing to move payment due dates.
Customers have to go through the merchant for their refund. Once the merchant has processed the refund, a refund is processed by Zip and the customer will get their money back.
Zip is connected with over 51,000 merchants globally, including Target, North Face and Wrangler. Consumers are also able to use an app or Chrome extension to make a purchase with retailers that are not integrated with Zip. Customers will receive a virtual, one-time card to fund their purchase either in-store or online.
Typical purchase amounts range between $35 and $1,500, but maximum amounts vary by retailer.
Who's this for? Zip, formerly known as Quadpay, is a buy now, pay later service available internationally. Zip is a good choice for consumers who want to use a BNPL option wherever they shop and don't want it to affect their credit score.
Zip has one product that's similar to Afterpay: consumers can make a purchase and pay it off in four interest‑free installment payments over six weeks. Much like PayPal 'Pay in 4', Zip has a value limit on orders, so you can generally only spend up to $1,500 (but maximum amounts vary by retailer).
Much like the other BNPL providers, Zip doesn't report these loans to the credit bureaus. It also doesn't perform any credit checks before approving customers for a loan.
One of the major perks of Zip is how easy it is to use at most retailers. Zip is connected to over 51,000 merchants globally, including Sears, Target, Apple, Zara and ASOS, and customers can also use the app or the browser extension to shop at retailers that are not integrated with Zip.
Whenever you use the app or the browser extension, you'll receive a virtual, one-time card to fund your purchase either in-store or online. That means you can use Zip to pay for dinner or groceries in person as well as for your online clothing orders.
However, Zip does come with one major drawback: It's the only BNPL provider we reviewed that charges a convenience fee. Zip charges customers $1 per payment they make or a $4 fee for their order.
There is some flexibility with payment due dates. If a customer is one day late for payment or has a delayed paycheck, Zip may move payment due dates if you contact the company and request more time.
Of the BNPL providers that we reviewed, Zip also has the highest customer satisfaction rating with the BBB with a 4.2/5 average rating based on over 1,000 customer reviews at the time of writing. BBB gives it a B rating based on its own rating system, and Zip is not accredited.
There is one loan option: Make 4 installment payments due every two weeks (for a total of 6 weeks). The first payment is due at the time of purchase.
There are no late fees.
Customers must go through the merchant in order to receive a full or partial refund.
Pay in 4 is available at millions of merchants through the app, but it's not accessible for merchants that aren't integrated with PayPal.
Orders must be between $30 and $1,500
Who's this for? PayPal is a global financial technology system known for its online payment system. It launched its own buy now, pay later product known as "Pay in 4," which is a good option for people looking for a short-term financing option with 0% interest, no late fees that aren't reported to the credit bureaus.
PayPal's 'Pay in 4' allows consumers to make four installment payments due every two weeks over a six-week period. The first payment, like a down payment, is due at the time of purchase.
Consumers are limited to taking out loans of less than $1,500, so it's not a great choice if you're looking to finance a really expensive purchase.
What distinguishes PayPal's 'Pay in 4' from other short-term BNPL providers Afterpay, is that it doesn't charge any late fees. It also does not report to the credit bureaus, so it won't affect your credit score.
When it comes to determining your eligibility for a loan, PayPal doesn't check your credit score most of the time. It will, however, occasionally perform a soft credit check. According to a representative at PayPal, the company uses "vast consumer data to understand an applicant's creditworthiness."
PayPal 'Pay in 4', unlike the other BNPL providers on the list, doesn't have a separate app, or browser extension or website that allows consumers to use the service at online or in-store retailers not integrated with the company. PayPal does, however, have the advantage of being an established, multinational financial technology company, so it has millions of merchants available such as Uniqlo, Estee Lauder, Target and Best Buy.
Since 'Pay in 4' is one of many products offered by PayPal, it doesn't have a separate BBB customer service rating.
The main advantage to using a buy now, pay later service, as opposed to paying with a credit card, is that they often don't charge interest and are easier to be approved for, though they typically require an upfront deposit.
Meanwhile, credit cards stand out for usually offering some form of rewards — either cash-back, points or miles — and being more widely accepted. Although credit card interest charges can become expensive, there are a number of 0% APR credit cards that offer no interest for a period of time. Further, credit cards allow you to pay off purchases at your own pace, as opposed to a set number of fixed payments. Some credit card issuers now also offer BNPL-like options, such as the Plan It® feature from American Express, My Chase Plan and Citi Flex Pay.
If you a prefer a 0% APR credit card over a BNPL service, here are some of our top picks to consider:
0% Intro APR for 21 months on balance transfers from date of first transfer and 0% Intro APR for 12 months on purchases from date of account opening.
19.24% - 29.99% variable
Balance transfer fee
Introductory fee of 3% ($5 minimum) for transfers completed within the first 4 months of account opening, then up to 5% ($5 minimum).
Foreign transaction fee
Read our Citi Simplicity® Card review.
2% cash back: 1% on all eligible purchases and an additional 1% after you pay your credit card bill
0% for the first 18 months on balance transfers; N/A for purchases
19.24% - 29.24% variable
Balance transfer fee
For balance transfers completed within 4 months of account opening, an intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies
Foreign transaction fee
See rates and fees. Terms apply.
Read our Citi® Double Cash Card review.
Enjoy 5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases
Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back. That's 6.5% on travel purchased through Chase Ultimate Rewards®, 4.5% on dining and drugstores, and 3% on all other purchases.
0% for the first 15 months from account opening on purchases and balance transfers
20.49% - 29.24% variable
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
Member FDIC. Terms apply.
Read our Chase Freedom Unlimited® review.
Select focused on the following features when examining popular buy now, pay later providers:
- APR: Some BNPL loans charge interest while others do not. Even if consumers pay off their installment payments on time and in full, they may be charged interest or an average percentage rate (APR) on their loan.
- Reporting to credit bureaus: Some POS loan providers report some or all loans to the credit bureaus while others report none. Additionally, some providers only report to some of the credit bureaus — Equifax, Experian and Transunion — while others report to all of them. Since POS loans have the potential to decrease your credit score regardless of whether you make your payments on time and in full (by decreasing the average age of your credit history), it's important to carefully read the terms of the loan to know if your score could be impacted.
- Late fees and other fees: Most BNPL providers only charged late fees if you failed to make your installment payment on time. However, some also charged convenience fees when you take out a loan.
- Credit checks: There are two types of credit checks, a hard credit check or a soft credit check. Hard credit checks can usually cause a small drop in your credit score, while soft credit checks have no impact on your credit score (while also looking at factors beyond someone's credit scores). (Affirm, however, did not disclose what specific factors they looked at.)
- Available merchants: We not only looked at the number of merchants that were directly integrated with the provider but also whether consumers could shop at merchants not partnered with the provider. Many BNPL providers either had an app, a browser extension or a website that enabled consumers to use a one-time card which gave them access to a BNPL loan to finance their purchases.