It’s easier than ever to get the items and services you want now, while kicking the bill down the line. Buy now, pay later -- also known as BNPL -- has become a popular payment method over the past few years. Let’s delve into what these plans are and how they work.
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.)
- Installment options: Pay in 4 (formerly Split Pay -- four payments made biweekly over six or eight weeks), biweekly and monthly terms
- APR: No interest for Pay in 4. 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, formerly 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 upfront 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.
- Installment options: Pay in 4 (four payments over six weeks), Pay in 30 days and monthly financing
- APR: No interest for Pay in 4 or Pay in 30 days. 0% to 29.99% 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 450,000 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 29.99% tacked on.
Klarna has over 450,000 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.
- Installments offered: Four payments over six 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.
- Installments offered: Four payments over six 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.
- Installments offered: Monthly payments
- APR: 0% to 36%
- Purchase limits: $300 to $15,000
- Fees: None
- Available merchants: 153 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 -- 153 -- 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 29.99% | 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 450,000 global retailers | Millions of global retailers | Around 100,000 global retailers | 153 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 |
Buy now, pay later apps explained
Buy now, pay later plans are micro installment loans that allow you to purchase items or services now and repay the balance over time. As an alternative to high-interest credit cards, buy now, pay later apps offer a way for you to afford what you need by splitting up the total into small payments, usually within six to eight weeks. They’re particularly attractive payment options as prices for everyday essentials continue to climb.
For most of these apps and services, there’s no hard credit inquiry, so using it won’t hurt your credit score. If, however, you end up applying for a special finance option or take out a larger loan over a longer period of time, your application could trigger a hard credit check.
BNPL apps work differently depending on the service and installment plan. Many offer a pay-in-four installment system, where you can split the cost into four different installments over a period of six weeks, with the first installment due upfront. The majority of pay-in-four plans don’t charge interest. Other BNPL apps offer monthly installment plans, with interest rates that are usually between 10% and 30%.
Some BNPL apps can be used at any online or brick-and-mortar stores 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 their app.
When should you use a BNPL app?
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. BNPL apps are best if you can afford equal payments when they’re due every other week. They might be a good fit for those who don’t have much of a credit history and wouldn’t otherwise qualify for a credit card.
Pros
It’s easy to qualify. If you’re averse to using a credit card, but need to buy a relatively expensive item right away, a BNPL service can make it easier for you to pay for it. Most apps require little time to apply and are easy to qualify for.
It’s simple to sign up. Many retailers offer BNPL services at checkout, so you can sign up quickly before you make your purchase. Once you agree to the terms of an app, you typically make the first part of your payment at checkout, with the remaining payments scheduled over the course of several weeks.
It won’t ding your credit. When you sign up for a credit card or installment loan, your application requires a hard credit check, which can cause your credit score to take a hit. You won’t face that with BNPL apps, provided you make on-time payments. Failure to do so, however, can negatively impact your credit score.
Cons
BNPL services won’t help you build credit. Even if you’ve used them for a few years, credit bureaus don’t see that usage, so there’s no way to prove how responsible you are with credit. This could hurt you in the long run because your credit score and history determine your ability to qualify for a loan, such as a mortgage or auto loan, as well as to sign up for a credit card.
BNPL services don’t encourage good spending habits. With the ease of checkout, it’s tempting to think that breaking up your payments over time is good for your pocketbook. But if you’re focused only on what you owe right now, will you be able to make the same payments in the following weeks? For example, you might be able to afford a $50 payment today, but after you pay bills and other obligations, will you be able to make another $50 payment in two weeks and then two more $50 payments after that the following month? Even when payments are broken up, you might not be able to afford your purchase.
Potential for accruing fees. In most cases, you won’t pay anything extra if you sign up for the traditional four-payment plan over the course of six weeks. But if you need special financing, including longer terms, or you miss a payment, you could face higher charges and fees compared with credit cards and other types of loans.
How to choose the best BNPL app
Although they have the same objective, BNPL apps aren’t created equally. Read the fine print before your next shopping excursion and consider these factors:
- Eligibility: Do you meet the criteria to qualify for the app? Will your credit be checked for approval and how (soft vs. hard pull)?
- Convenience and need: How easy is the app to use and manage? How do the benefits and features of the app fit your shopping and financial needs?
- Coverage: Where is the app accepted?
- Credit limit: How much are you allowed to spend? Does the app provide special financing options?
- Credit reporting: Although most BNPL apps don’t report your usage to the major credit bureaus, are there some apps that do report your activity based on loan size or special financing plan? How will this impact your credit?
- Customer reviews: What do shoppers think of the app?
- Fees: How much are you charged in fees per purchase? How are the fees applied (late payment, interest rate)?
- Terms and conditions: What is the app’s policy when making purchases and payments? How will you be penalized if you’re late on a payment?
FAQs
Both BNPL apps and credit cards allow you to make purchases and pay off your balance later -- whether that be on a credit card’s monthly due date or through whichever BNPL installment plan you choose. But there are some key differences.
If you can’t pay back your full credit card balance by your monthly due date, your balance will begin accruing interest -- and the average credit card APR is 19.94%. In contrast, if you’re using a BNPL Pay in 4 option, you’ll be able to pay back what you owe without paying interest (though you may have to pay late fees if you can’t make a payment). Furthermore, tardy or missing payments won’t impact your credit score for most BNPL services.
Longer-term weekly or monthly BNPL options may charge interest fees up to 30%. While this percentage is higher than many credit card APRs, BNPL apps charge simple interest, while credit cards charge compound interest. This means that when you use BNPL apps, you’ll only owe interest on the amount borrowed, as opposed to credit cards, which continue to accrue interest on both the principal and existing accumulated interest.
Ultimately, if you’re deciding between paying with a credit card or BNPL app, make sure you’re thinking about interest charges, late fees and when you can repay your balance.
Most BNPL apps conduct a soft credit inquiry before you can use them, but soft credit inquiries don’t affect your credit. For the last few years, there has not been a regulated method to incorporate data from BNPL apps into users’ credit reports -- so, currently, payment activity for most BNPL apps won’t impact your credit score. However, last year, Experian, one of the three major credit bureaus introduced its Buy Now Pay Later Bureau, to determine how to report on BNPL plans -- so be aware that change is likely on the way.
In the meantime, a lack of reporting can be both a blessing and a curse. Irresponsible spending and missed payments using most BNPL apps won’t -- for now -- impact your credit. However, without credit consequences, you will need to be careful and disciplined in your use of BNPL apps to avoid financial overextension. On the other hand, on-time payments also won’t help boost your credit score.
An increasing number of BNPL apps have been releasing virtual cards. These one-time-use digital cards are created via BNPL apps and stored in virtual wallets, such as Apple Pay and Google Pay, to use at select online and in-person retailers. Virtual cards are much safer than physical cards -- even if they’re hacked, your account won’t be compromised, and since they’re located in a digital wallet, you can’t lose them. However, the real benefit of virtual cards in the BNPL world is that they’re easier for merchants to adopt, giving BNPL users access to a larger pool of retailers.
Methodology
CNET reviews loan products by exhaustively comparing them across set criteria developed for each category. For buy now, pay later installment loans, we examine the availability of services, repayment plan terms, interest charged, fees charged, credit requirements, purchase limits and the amount due at the time of purchase.
Our data comes directly from the individual buy now, pay later services’ terms and conditions.
Apps reviewed
- Affirm
- Afterpay
- Klarna
- PayPal
- Perpay
- Sezzle
- Splitit
- Uplift
- Zip
The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.
