Afterpay provides “buy now, pay later” payment plans for online and in-store purchases at many major retailers, including Old Navy, Nordstrom and Gap.
Its pay-in-four plan comes with no interest and no fees if you pay on time, though it charges a late fee for missed payments. It also offers monthly repayment terms that may help you finance a larger purchase.
» COMPARE: The best buy now, pay later apps
Afterpay at a glance
Loan amount | $200-$2,000. |
Payment structure | Pay-in-four plan. |
Interest | 0%. |
Availability | Available online and in stores. |
Conducts soft credit check | Yes. |
Minimum credit score | None. |
Late fee | Up to $8. |
Other fees | No other fees. |
Option to reschedule a payment | Yes. |
Pauses account when payment is missed | Yes. |
How does Afterpay work?
Afterpay pay-in-four
Afterpay offers a pay-in-four plan, which lets shoppers divide their purchase into four equal installments, due every two weeks, with the first payment due at checkout.
For example, if your purchase costs $200, you'd pay $50 at checkout. The three remaining $50 payments would be due every two weeks until you’ve paid off the full $200.
Payments are automatically billed to the debit or credit card you used to make the purchase. You can also add your bank account as a payment method. If you’re making an especially large purchase, it’s possible your first payment could be higher than the others, though Afterpay will show the plan’s full breakdown before you pay.
Afterpay doesn’t charge interest for its pay-in-four, but if you miss a payment, you may incur a late fee.
Other Afterpay payment options
Afterpay also offers monthly financing with a six- or 12-month repayment option. These loans charge interest, ranging from 6.99% to 35.99% annual percentage rate (APR) and are not available in Hawaii, Nevada, New Mexico or West Virginia. Afterpay’s monthly financing can be used only at select online retailers for purchases of $400 or more.
Is Afterpay a good idea?
Whether you should use Afterpay depends on your financial situation. Weigh the pros and cons below to decide whether it’s the right fit for you.
Where Afterpay stands out
Zero-interest loans: Afterpay’s pay-in-four divides the total cost of your purchase into smaller installments for zero interest, which may help you pay for something you couldn’t afford upfront. This type of no-interest financing is hard to find among other credit products.
Free payment rescheduling: Afterpay lets you reschedule one payment per order for no additional fee. Not all BNPL providers allow this type of flexibility, and it can help you avoid a late fee by pushing the payment date further out until you have the funds.
Pauses account after missed payment: If you miss a payment, Afterpay will automatically pause your account, so you can’t make additional purchases with Afterpay until you catch up. This consumer safety feature can help prevent you from overextending your budget.
Where Afterpay falls short
Charges late fee: Following a 10-day grace period, Afterpay will charge a late fee for missed payments, which not all BNPL providers do. Although Afterpay charges only one $8 fee per installment and late fees are usually capped at 25% of the order value, this can majorly increase the cost of your purchase.
Payments aren’t reported to the credit bureaus: Though BNPL providers don’t typically report on-time payments to the three major credit bureaus (Equifax, Experian and TransUnion), some have opt-in credit reporting or will report for certain loans. With Afterpay, payment history isn’t reported, so you can’t build credit. Building credit is important because the better your credit score, the more likely you can qualify for other financing products like credit cards or loans.
Accepts credit cards for repayment: Afterpay lets you tie your pay-in-four loan to a credit card for repayment. Though this is common among BNPL providers, consumer advocates argue it’s risky allowing repayment of credit with credit because you can incur additional interest (if you carry a balance on your credit card, for example) or take on too much debt.
What to know about 'buy now, pay later'
You can now use “buy now, pay later” to check out at most retailers. The type of payment plan — and whether it charges interest or fees — depends on the BNPL provider, so it’s important to pay close attention to the loan terms you’re offered at checkout.
For some users, BNPL is a smart way to break up a purchase, especially if you get a zero-interest offer and are positive you can afford the installments. Getting approved may also be easier compared with credit cards or loans because there’s no minimum credit score requirement.
But BNPL is still a form of debt, and there are risks. The Consumer Financial Protection Bureau released a study in September 2022 raising concerns about inconsistent consumer protections, the ease of debt accumulation and overspending, and data harvesting and monetization. Another CFPB study from March 2023 identified BNPL users as more likely to show signs of financial distress.
BNPL pros | BNPL cons |
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NerdWallet recommends using BNPL for necessary expenses only. Though BNPL can be a convenient and low-cost payment option, you’re still taking on debt, and it’s rarely a good idea to go into debt for a nonessential purchase.
How to get approved for Afterpay
To be eligible for Afterpay, you’ll need to be at least 18 years old in most states, be a U.S. resident and have a valid email address, mobile phone number, mailing address and payment method. To use Afterpay’s monthly plan, you may need to verify your identity (likely by providing a government-issued ID).
Approval decisions are instantaneous and will depend on several factors, including whether there are sufficient funds available through your debit or credit card, how long you’ve been using Afterpay, the purchase price and whether you have other outstanding orders with Afterpay.
Does Afterpay check credit?
Afterpay may perform a soft credit check, which doesn't hurt your credit score. Afterpay doesn't disclose a minimum credit score requirement, and borrowers with fair or bad credit (689 credit score or lower) may be eligible to use Afterpay.
How does Afterpay compare?
Afterpay is similar to pay-in-four plans offered by Klarna and Sezzle, which also charge zero interest and no fees if you pay on time. Klarna and Sezzle offer monthly payment plans but with longer terms compared with Afterpay.
Interest | Terms | Fees | |
|---|---|---|---|
Affirm 5.0 NerdWallet rating |
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Afterpay 4.0 NerdWallet rating |
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Apple Pay Later 4.5 NerdWallet rating |
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Klarna 4.0 NerdWallet rating |
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PayPal 4.0 NerdWallet rating |
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Sezzle 4.0 NerdWallet rating |
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Zip 3.5 NerdWallet rating |
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» COMPARE: The best buy now, pay later apps
How to get Afterpay
Download the Afterpay app
You can get started with Afterpay by downloading its mobile app, creating an account and shopping at Afterpay’s partner stores.
Shop with Afterpay online and in stores
Some retailers have Afterpay integrated into their online checkout. That means when you’re ready to pay, you can apply and opt in to Afterpay on the retailer’s website, even if you’ve never used the service before.
If you want to shop in person with Afterpay, you’ll need Afterpay’s virtual card, which you can download from the app after creating an account. Save this card to your mobile wallet and use it to check out at the register.
Alternatives to Afterpay
If you have good or excellent credit (690 credit score or higher), you may consider a 0% APR credit card. These cards offer introductory periods of up to 21 months and charge no interest during that period. You may also receive a sign-up bonus or access to a rewards program.
If you’re looking to fund a large, essential purchase, you could apply for a personal loan. Personal loans have fixed interest rates and longer repayment terms, and there are options for borrowers with fair or bad credit (689 credit score or lower).
You can pre-qualify with NerdWallet below to see your loan options. Pre-qualifying doesn’t affect your credit score.
