7 Best Buy Now Pay Later Sites of 2022: An In-Depth Review

Buy now pay later (BNPL) apps and sites have surged in popularity in recent years, especially among younger consumers. The number of BNPL users in the U.S. grew by 81% in 2021 alone, according to data from Insider Intelligence. It‘s easy to see the appeal – these apps allow you to split a purchase into smaller, more manageable payments over time, often with no interest. They provide a convenient and accessible form of short-term financing.

But with so many different BNPL providers now available, it can be challenging to determine which one is right for you. Each app has its own unique features, benefits, and potential drawbacks to consider. In this comprehensive guide, we‘ll dive deep into the 7 best buy now pay later sites of 2022. We‘ll explore the key factors you should evaluate and provide detailed insights to help you make an informed decision.

Key Factors to Consider When Comparing BNPL Sites

Before we get into the specifics of each app, let‘s discuss some of the most important criteria to look at when choosing a BNPL provider:

Interest Rates

One of the biggest selling points of BNPL is the potential for interest-free payments. Many apps, especially those offering short-term payment plans, charge 0% interest as long as you make your installments on time. However, some apps do charge interest for certain plans (like monthly financing options). Always check the interest rates and note that they can vary based on the retailer, purchase amount, and duration of the loan.

Fees

While many BNPL apps don‘t charge interest, they may still have fees, particularly for late or missed payments. Some common fees to watch out for include:
– Late payment fees: Often $7-10 per missed payment, sometimes capped at 25% of the purchase price
– Returned/rejected payment fees: For insufficient funds or expired cards, around $10 per instance
– Transaction fees: Charged by a few apps on every purchase, typically around $4

Be sure you understand all potential fees before agreeing to a loan. Avoid BNPL if you don‘t think you‘ll be able to keep up with the installment schedule.

Credit Checks

Most BNPL providers perform a "soft" credit check when you apply, which won‘t impact your credit score. However, some may do a "hard" pull for certain financing options, like longer-term loans. This can temporarily ding your credit score by a few points.

Also, be aware that some BNPL activity may be reported to the credit bureaus. This is a double-edged sword – if reported, on-time payments could boost your score over time, but late payments could significantly damage your credit.

Loan Terms

Consider what repayment terms the app offers and what will work best for your budget. The most common BNPL loan type is "Pay in 4" – four equal installments paid over six weeks. But many apps also offer longer monthly financing plans. In general, longer terms mean higher interest rates and more time for life to get in the way of your payments.

Merchant Partnerships

Some BNPL apps can only be used with partner retailers, while others issue a "virtual card" that can be used almost anywhere. Consider where you tend to shop and which apps are accepted there. Having more options gives you flexibility.

Purchase Limits

Each app sets minimum and maximum purchase limits. These can start as low as around $35 and go up to $17,500, depending on the app and your specific profile. Higher purchase limits can be convenient, but they can also make it easier to overspend. Be honest about how much financing you really need access to.

7 Best Buy Now Pay Later Sites

Now that we know what to look for, let‘s explore the top 7 BNPL apps of 2022 and how they stack up. We‘ll cover the key details and help you determine which one might be the best fit for your needs.

1. Affirm: Best for Flexibility

Affirm is one of the most versatile BNPL options, offering a wide range of short-term and long-term payment plans. For smaller purchases, you can use their 0% APR "Pay in 4" option and spread the cost over six weeks. For larger buys, Affirm has monthly financing plans ranging from 1-48 months, with interest rates from 0-30% based on your credit.

One standout feature of Affirm is their virtual card, which you can use at most online or brick-and-mortar stores, even if they don‘t have a partnership with Affirm. So you have the flexibility to BNPL almost anywhere. They also never charge any late or hidden fees. The trade-off is that their longer financing plans can come with high interest rates for some, and that activity may be reported to credit bureaus.

2. Klarna: Best for Rewards

Klarna is another top BNPL app that gives you multiple ways to pay. You can choose from:
– Pay in 4: 4 interest-free payments over 6 weeks
– Pay in 30: Defer the full payment for 30 days, interest-free
– Monthly Financing: Longer 6-36 month payment plans with interest rates from 0-29.99%

Klarna has partnered with thousands of stores, including major retailers like Macy‘s, Sephora, and GameStop. So it‘s accepted at many popular shopping destinations. They also offer some enticing perks through their app, like exclusive coupons, price drop notifications, and a rewards club where you can earn gift cards for hitting spending goals.

One thing to note is that Klarna does charge late and returned payment fees up to 25% of the purchase amount. Their monthly financing options may also come with high interest rates and are reported to credit bureaus.

3. Afterpay: Best for Responsible Spending

Afterpay aims to empower responsible spending by starting users off with lower purchasing limits (around $600). But the more you use the app and pay on time, the more your limit can grow over time. So it rewards smart spending habits and helps you avoid taking on too much financing too fast.

Afterpay only offers one repayment option: 4 interest-free installments over 6 weeks. This straightforward approach, paired with their lower initial limits, encourages users to only BNPL what they can afford to pay back quickly. Their app also lets you set up automatic payments so you never miss a due date. Another perk is that Afterpay never reports to credit bureaus, so using it won‘t impact your credit score either way.

The main downside of Afterpay is their steep late fees – $10 for the first missed payment, then $7 for each additional one, up to 25% of the order value. They also can only be used at participating retailers.

4. PayPal Pay in 4: Best for Online Shopping

If you already use PayPal, their Pay in 4 feature can be a convenient way to BNPL wherever PayPal is accepted – which is most major online stores. It lets you split any purchase from $30-$1500 into 4 interest-free payments over 6 weeks. And since it‘s connected to your PayPal digital wallet, you can manage your installments right alongside your other PayPal activity.

The main drawback is that PayPal‘s Pay in 4 can‘t be used for in-store purchases, only online. Their purchase limit is also lower than some other apps at $1500 max.

5. Zip (Formerly Quadpay): Best for Bad Credit

Zip (previously known as Quadpay) markets itself as an inclusive BNPL option, because most users are approved instantly without a credit check. Instead of checking your credit history, Zip looks at other factors like your bank account and identity to determine your eligibility.

They offer a standard Pay in 4 plan with no interest and a $1500 purchase limit. However, Zip does charge a $4 transaction fee on every purchase, so be sure to factor that into your repayment budget. They also charge late fees, though lower than some apps at $5, $7, or $10 per missed payment.

6. Sezzle: Best for Building Credit

Like Zip, Sezzle offers an easy approval process, since they only perform a soft credit check for new users. They provide a 0% APR Pay in 4 option with payments over 6 weeks. And as long as you pay on time, they don‘t report your activity to credit bureaus.

However, Sezzle has a unique perk called Sezzle Up, which is a monthly financing plan that can help you build credit. With on-time payments, Sezzle Up activity gets reported to the credit bureaus and can boost your score over time. But there is a flip side – late payments will also get reported and can damage your credit, so make sure you stay on track.

Sezzle also partners with the lenders Ally and Bread to offer long-term installment loans. These do come with interest based on creditworthiness, but they let you finance much larger purchases up to $40,000 and pay over a longer period. This can help with bigger ticket items like furniture and electronics.

7. Splitit: Best for Existing Credit Card Users

Splitit puts an interesting spin on BNPL, because instead of issuing new loans, they let you split payments on your existing credit cards. Here‘s how it works: When you make a purchase with Splitit, they place a hold on your available credit for the full amount and then release that hold in smaller chunks with each installment you pay. So you can spread out a purchase over time without taking on new debt.

Splitit has 0% interest and no credit check, since you‘re basically just continuing to use your regular credit card. As long as you pay your installments on time, you won‘t pay any interest or fees to Splitit. However, your payments will still be subject to the interest rate and terms of your original card. On the plus side, Splitit purchases are also eligible for any reward points, cash back, or other perks offered by your credit card provider.

The main drawbacks are that you need to already have a credit card to use Splitit, and it‘s not compatible with American Express. Your available financing will also be limited to your existing credit line. Think of Splitit as a helpful budgeting tool for your credit card purchases.

BNPL and Your Credit Score

Before using BNPL, it‘s important to understand how it could potentially impact your credit. While the effects are usually minimal, there are a few scenarios in which BNPL activity could move the needle on your credit score.

Most BNPL providers only conduct soft credit checks, which don‘t show up on your credit report or influence your score. Some may not check your credit at all. And many apps don‘t report your on-time loan activity to the major credit bureaus – in this case, your payments won‘t help or hurt your score.

However, some BNPL plans, like longer-term monthly financing, may involve a hard credit inquiry. This could ding your score by a few points temporarily. These plans are also more likely to be reported to the credit bureaus. If you pay on time, this could actually help build your credit over time. But if you miss payments or default on the loan, you could see a big negative impact to your score.

Additionally, even if an app doesn‘t normally report activity, many will send significantly late payments (usually 30-60 days past due) to collections. Collections will always damage your credit score and stay on your report for years. So use BNPL responsibly and don‘t take on more than you can reliably pay back.

Tips for Smart Spending with BNPL

BNPL can be a useful tool for affording essential purchases and treating yourself from time to time. But like any form of debt, it should be used thoughtfully. Here are some tips to help you stay in control of your spending:

• Don‘t think of your BNPL limit as "extra money" to spend. Every dollar you finance is a dollar you‘ll need to pay back.

• Use BNPL for items you intended to buy anyway, not impulse buys. Avoid "deals" and sales that encourage you to overspend.

• Stick to shorter repayment plans whenever possible. Longer terms and higher value loans are harder to pay back and usually involve interest.

• Add your BNPL due dates to your calendar or set up autopay. Late fees can add up quickly and may even be reported to credit bureaus.

• If you‘re using BNPL to break up a necessary large purchase, like a household appliance, compare the interest rates to other options like a credit card or personal loan.

• Be cautious about using multiple BNPL apps at once. It can be hard to keep track of several loans and payment schedules.

• If you find yourself relying on BNPL too often, it may be time to reevaluate your budget or work on building an emergency fund so you can afford more upfront.

The bottom line is to make sure your BNPL plan is affordable and that you have a clear strategy for repayment. Don‘t let the ease of breaking up a purchase lure you into unwise spending.

The Future of BNPL

As BNPL continues to gain popularity, we can expect to see the apps and offerings evolve. Some experts predict that in the coming years:

• We‘ll see more BNPL options for services, travel, and healthcare, rather than just retail goods. Some apps have already started partnering with airlines, hotels, and doctor‘s offices.

• BNPL will become a standard payment method, as ubiquitous as credit cards. Most major retailers will likely partner with at least one BNPL provider.

• Banks and credit card companies will increasingly develop their own BNPL plans to compete with the third-party apps. We‘ve already seen this with PayPal‘s Pay in 4 and Chase‘s My Chase Plan.

• There may be more regulation and consumer protection laws around BNPL as it becomes mainstream. Governments are taking notice of the industry‘s massive growth.

• We‘ll likely see more BNPL apps offering perks and incentives to stand out, like Klarna‘s rewards program and Affirm‘s exclusive discounts.

However the market shifts, it‘s clear that BNPL is here to stay as a popular financing option, especially among digitally-savvy younger consumers. But as the landscape gets more crowded, it will be important for users to carefully evaluate their options and choose the plan that makes the most sense for their unique financial situation and goals.

Choosing the Right BNPL App

With so many BNPL providers now available, there‘s likely an option that can work well for your needs. Consider your spending habits, which features matter most to you, and what level of financing you‘re looking for.

If you value flexibility and want to BNPL both online and in-store, an app like Affirm with a virtual card could be a good fit. If you‘re working on building your credit, you may appreciate Sezzle‘s credit-positive monthly plan. If you want to keep things simple and stick to a tight budget, a 0% interest Pay in 4 plan with lower limits, like Afterpay or Klarna, could help you stay on track.

No matter which BNPL app you choose, be sure to spend responsibly, keep up with your payments, and don‘t hesitate to reevaluate if your financial situation changes. By using BNPL strategically and staying informed, you can enjoy the convenience of splitting up payments while protecting your long-term financial health.