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You can use 'buy now, pay later' almost anywhere you make a purchase — here are the pros and cons

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Imagine this situation: You're itching to check out an expensive new restaurant, but you know don't have enough money to cover the cost of your meal upfront. You could wait until you get your next paycheck or you could use a 'buy now, pay later' loan to pay for your dinner tonight.

BNPL, also known as point-of sale loans, allow consumers to split up the cost of their purchases into installment payments (typically) due every two weeks, sometimes with no interest. While most consumers are using BNPL when shopping online at retailers like Target, Walmart and Amazon, many BNPL providers also offer a virtual card that enables consumers to use the service when shopping in-person.

Popular providers like Klarna, Sezzle, Affirm, Afterpay and Zip (formerly known as Quadpay) all have their own virtual cards that allow consumers to split their in-person purchases into installment payments — and in some cases you can use the loans anywhere, including restaurants. With a virtual BNPL card, you could split the cost of a $100 dinner into four installment payments of $25 due every two weeks over the span of a six weeks.

It seems easy, right? Before you rush to finance every aspect of your life with a BNPL loan, Select explains how the BNPL virtual cards work, how consumers can use them and pros and cons of paying for everything with one.

Using BNPL virtual cards

Many BNPL providers allow you to create a virtual card that you can add to your Apple Wallet or Google Pay. For most cards, you'll have to download an app that you use to request a virtual card. 

For example, with Zip Pay, you enter the amount of money you're going to spend in-store in the app. Zip then performs a soft credit check and will approve or deny you for the loan. Afterwards, it will generate virtual card that you can use at checkout just like you would use Apple Pay.

While Zip has partnerships with thousands of brands, it also allows its users to use a loan just about anywhere. This means you can use the Zip virtual card to finance anything from paying off your dentist's bill to buying a concert ticket, even if the service is not integrated as a payment method at the retailer you're shopping at.

Zip (previously known as Quadpay)

  • Interest rates


  • Loan terms

     4 interest‑free installment payments over 6 weeks

  • Fees

    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.

  • Return policy

    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.

  • Available merchants

    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.

  • Loan amounts

    Typical purchase amounts range between $35 and $1,500, but maximum amounts vary by retailer.


  • Doesn't perform a credit check
  • Doesn't report to the credit bureaus so using the service won't help or hurt your credit score
  • 0% interest


  • There's a minimum $4 fee for each loan you take out ($1 for each payment)
  • There's a $7 fee for each late installment payment
  • You can only opt for a 6 week BNPL option so it's not a good choice if you need a longer repayment period

Loans taken out through Zip Pay have a repayment period of six weeks; there's also a long-term financing option known as Zip Money for purchases over $1,000. Affirm's virtual cards enable people to choose longer repayment periods of six weeks, or three, six or twelve months. 

Affirm's virtual card works similarly to Zip's and can be use for shopping online or in-store at merchants not partnered with the provider. Affirm is also working on a new debit card, the Affirm Debit+ which connects to consumers' existing bank accounts. With Affirm Debit+, consumers will be able to use the card to either pay for their purchase in full as they would typically do with a debit card or finance them with a BNPL loan. The product is currently under beta testing. 


  • Interest rates

    0% to 36%

  • Loan terms

    One to 48 months

  • Fees

    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.

  • Return policy

    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.

  • Available merchants

    Affirm has more than 245,000 merchants including Amazon, Peloton, adidas and Target. Through 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.

  • Loan amounts

    Up to $25,000 on a purchase.


  • Doesn't charge any late fees
  • There are a lot of merchants that offer 0% APR
  • You can use Affirm at whatever online or in-person retailer you choose to with its app or via its website
  • The 0% 4 biweekly payment loans are not reported to the credit bureaus


  • Loans that are reported to the credit bureaus could end up hurting your credit score regardless of whether you pay them off on time and in full
  • You could end up paying a high interest rate if you can't secure a 0% loan

Other BNPL providers, like Afterpay, have virtual cards, but you can only use the card when shopping in-person at participating stores. 

What are the pros and cons of using a a BNPL loan everywhere?

Consumers should be careful about using these virtual cards to fund their in-person purchases. BNPL providers can sometimes carry hefty late fees. Plus, you should consider interest rates and the impact it could have on your credit score.

While Zip Pay boasts 0% interest rates on its BNPL loans, each purchase has a $4 transaction fee ($1 per payment) and there's a $7.95 monthly fee if you don't pay your statement closing balance in full by the due date. So your $100 meal will really cost $104, and potentially more if you don't pay on time.

Affirm has no late fees, but the interest rate could be as high as 30%. Furthermore, Affirm reports some loans to Experian, so if you're opting for a longer-term BNPL loan (or even a six-week loan) with the virtual card, you could end up hurting your credit score because BNPL loans can reduce your average account age and the length of your FICO credit history. (Note: Affirm doesn't report its 0% and four biweekly payment loans or loans that have one option of a 0% three month payment term.)

Bottom line

BNPL virtual cards provide people with the convenience of being able to split up the cost of dinner or an unexpected medical bill, sometimes with no interest charges, making it a good deal for anyone look to stretch out their payment timeline.

But as convenient and as simple as it may seem to use a BNPL virtual card, consumers should be wary of using them regularly to pay for their next in-person or online purchase. There's the potential a BNPL can have a negative impact on their credit score and there may be interest charges and late fees. You also won't have opportunity to earn rewards or cash back like you do with a credit card.

It's also important to be mindful of your spending: Using BNPL could cause you to overspend on your purchases because you might be spending money that you don't yet have.

If you regularly use BNPL to pay for things, make sure to track your spending so you can keep a close eye on the various bills you have outstanding from the different BNPL providers. And consider if you really want to be paying for that meal six weeks after you first enjoyed it.

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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