Afterpay Review – Buy Now, Pay Later in 4 Installments

Name: Afterpay Review – Buy Now, Pay Later in 4 Installments
Item: Afterpay
Rating: 8

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Last Updated:March 31, 2024

Afterpay Review – Buy Now, Pay Later in 4 Installments

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Afterpay is a convenient, easy-to-use option for those who just need a little longer to make a payment.

8/10

Cost

8.5/10

Features

8/10

Ease of use

9/10

Services

8.5/10

If you’ve made any shopping purchases in the last couple of years, you’ve likely seen a surge of offers for Buy Now, Pay Later. Several companies have popped up, and now we have more choices than ever for breaking up large payments into more manageable, bite-sized chunks. Afterpay is one example of these companies, but what makes it different from the others we see at checkout?

Buy Now, Pay Later (BNPL) is hardly a new concept. Some researchers find examples of the service dating back 200 years. A purchase that meets specific criteria can be broken up into smaller payments so a consumer can buy over time instead of shelling out a chunk of money upfront. Usually, there’s an incentive for the buyer, such as no interest if paid in full by a specific date, plus they have access to their product right away.

So how does Afterpay fit into this BNPL equation?

Jump To

What is Afterpay?

Afterpay was founded in 2014 by co-founders Anthony Eisen and Nick Molnar. It’s an Australian company that experienced a meteoric rise quickly, thanks partly to the popularity of BNPL use by Millennials and Gen-Z. By 2016, Afterpay stock was being traded on Australia’s stock exchange. By May 2018, Afterpay was available in the U.S., and you may have even seen a tweet or two from none other than the Kardashians about it.

Fast forward to 2024, Afterpay is now a major player in the BNPL landscape, and North America is now its biggest market.

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How does Afterpay work?

Afterpay is a BNPL service, but you must first download the Afterpay app. Through the app, you shop for products and select Afterpay as a payment method. You can also download Afterpay into your digital wallet to make in-store purchases.

Once downloaded, you immediately find out if you can use the installment plan. You’re also given a “credit limit” with a maximum amount for which you’re approved. Over time, with on-time payments, this limit is increased. The limitations of the retailer also determine loan amounts.

Once you select an item, you have four installments over six weeks to pay it off. If you stay within the four-week payment plan, you will never have to pay interest.

How much does Afterpay cost?

Afterpay may be interest-free if you pay off your balance within four weeks, but there are other fees to be aware of. If you are late on a payment, you’ll be charged up to an $8 late fee until the payment.

Afterpay features

Convenient

It’s hard to beat the convenience of the Afterpay app. It’s accepted at a wide range of online and in-store retailers. You can either shop through the links in the app or download to your digital wallet for use in approved retailers in-store.

Instant approval

Within moments, you’ll know if and how much you’re approved for.

Soft credit check

Afterpay runs a soft check on your credit, which doesn't affect your score.

Easy terms

The terms are straightforward and outlined in the app and website. You’ll know exactly what you’re responsible for with payments.

Afterpay is free to use

If you pay within six weeks, the account is virtually free. They will not charge interest. Keep in mind the account is subject to late fees if you’re late with payments.

Amazing retail selection

Chances are, if you have a purchase in mind, then Afterpay has a retailer to choose from. Many retailers offering the Afterpay service are extensive, ranging from designer fashion to pet stores.

Thousands of retailers globally offer Afterpay, including popular options like Amazon, CVS, and Target.

Payment flexibility

If for some reason, you can’t make a payment right away, you do have the option to extend the payment schedule for a few days later to avoid a late fee.

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Who is Afterpay best for?

Afterpay is a fantastic option for anyone who needs to make a larger purchase and pay it off within six weeks. Since you have four installment payments available, you can break down a heftier purchase price without wreaking havoc on your budget.

It’s also ideal for those on the go who prefer managing finances through a mobile app. You’ll receive text reminders for payments, and then you can easily pay through the app or online.

Who should avoid using Afterpay?

If you’re concerned you won’t meet the payment terms within six weeks, you should avoid using Afterpay.

You should also look elsewhere if you need an installment payment option to help you build your credit. Since Afterpay does not report to the credit bureaus, your on-time payment history isn’t reported either. Although it’s a convenient way to shop and pay, it doesn’t help you improve your credit score.

Pros and cons

Pros

Ultra-convenient and easy to use
Wide range of retailers and products to choose from for installment payments
Soft credit check that doesn't impact your score

Cons

Late fees
Does not help build credit or improve credit score
Your spending limit is limited to shopping with approved retailers

Afterpay vs. Klarna vs. Affirm

How does Afterpay stack up to other companies in this crowded BNPL marketplace?

Company	Late fee	Minimum credit score
Afterpay	$8	N/A
Klarna	$7	N/A
Affirm	$0	None

Klarna

Klarna is similar to Afterpay in that you can pay in four equal installments. You can make the first payment when you purchase the item, and then you pay the remaining balance in installments every two weeks - known as the “Pay in 4” option. There’s also an option to pay the entire balance within 30 days instead of in installments.

You'll need to be a subscriber, however, which comes with a $7.99 monthly fee.

Read a full review on Klarna.

Affirm

Affirm works differently than Afterpay and Klarna, although it is another option for BNPL. The retailer determines the installment plan and works with large retailers such as Amazon and Walmart. Most retailers allow you to make installments in three-, six-, or 12-month options, but some are as high as 48 months.

Read a full review on Affirm.

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If you're tight on cash right now, you may want to consider getting a personal loan. A personal loan is a loan that you can use for just about any purpose like: paying off other debt, renovating your home, or family needs like a wedding or adoption.
TrustPilot Rating 4.6 out of 5
Connect with lenders for $0
100% online experience.

See How Much You Can Get Through Quicken Loans

FAQs

Does Afterpay check my credit?

No, Afterpay does not run a credit check to determine if your account is approved or not. This also means late payments are not reported either.

What credit score do I need to qualify for Afterpay?

There’s no minimum credit score needed to qualify for Afterpay. The loan amount is determined by the amount of funds available on the debit or credit card you use for the application.

What if I need to return an item I bought with Afterpay?

If you need to return an item you purchased with Afterpay, you have to work with the merchant for the return. Meanwhile, you have to continue making payments to Afterpay. The merchant will need to refund your debit or credit card.

The bottom line

Afterpay is a convenient, easy-to-use option for those who need a little longer to pay. It offers another payment option when you don’t want to use a larger sum of cash or credit to fund a purchase. With many retailers, chances are high that you can find a buying option that fits your needs through Afterpay. And as long as you make your payments on time, Afterpay won’t cost you anything.

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Sara Coleman is a former corporate gal turned creative entrepreneur. She began writing professionally several years ago and now contributes to multiple websites, blogs, and magazines. She’s also an avid reader and can’t resist a great historical fiction novel. Sara holds a BA in journalism from the University of Georgia and can be found supporting her Bulldogs every chance she has. She resides in Charlotte, North Carolina, with her wonderfully supportive husband and three children. When she’s not ushering her kids to sports and dance lessons, she can be found creating content for her own website, TheProperPen.com.

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