The Best Buy Now, Pay Later Apps: How Do They Compare?

Buy now, pay later apps enable shoppers to make purchases they may not be able to afford otherwise. Such financial services take a large purchase and break it up into smaller payments over a set amount of time.

Over the years, more buy now, pay later apps have appeared on the market, competing for attention from prospective shoppers. To help you find the best one, we compared five top competitors: Affirm, Afterpay, Sezzle, Klarna and PayPal.

What Is a Buy Now, Pay Later App?

Sometimes significant expenses occur and you may not have planned for them. Other times, you may want to reward yourself with a purchase you can’t afford all at once. Buy now, pay later apps are one type of financial service that can assist you with such purchases.

You can purchase at supported retailers using buy now, pay later apps, splitting large purchases into smaller, more manageable installments. While most services support only select retailers, some options enable purchases nearly anywhere.

The credit limit (spending limit) you receive for each app is based on different behind-the-scenes calculations by each service. If you are making a large purchase, you may want to sign up with a few apps to see which offers you the highest credit limit.

Buy now, pay later apps vary by interest rates (although all offer interest-free options), payment plans, retail partners and potential effect on your credit score. We examined features of five apps to help you find the best choice for your purchasing needs.

Starting with the positive news: All buy now, pay later apps allow you to split large purchases into interest-free payments. However, not every option is interest-free, so it is vital to know the differences between payment plans.

All of the apps in our roundup — Affirm, Afterpay, Sezzle, Klarna and PayPal — offer zero-interest installments as part of their Pay in 4 plans. With Pay in 4, shoppers can make a purchase and divide it over four installments (with a down payment) every two weeks — no need to pay interest.

Any service that offers monthly payment installments will force you to pay interest on your purchase. Monthly payment installments are available via Affirm, Klarna and PayPal.

The services we examined charge interest ranging from 0% to 30% APR — depending on your approval. Klarna potentially offers the best interest rate, capping itself at 25%.

When splitting up your large purchase into smaller installments, you generally have one of two options. The first is the increasingly popular Pay in 4 option, which enables you to divide your purchase into four separate interest-free payments over six weeks.

All of the buy now, pay later apps we feature in this guide support the Pay in 4 financing option, with the first payment due at the time of purchase (a down payment). After that, you will owe an additional three charges every two weeks via your bank account.

Affirm, Klarna and PayPal also offer more traditional monthly payments, but they will charge interest. Depending on the size of your purchase and the options provided by the financing company, you will split your purchase over several months.

PayPal offers the most extended financing option, with monthly payments split up to 24 months. More typical offerings span from six months to a year.

No one enjoys late fees, but life does happen and you may miss payments occasionally. Out of the buy now, pay later apps we examined, two offer no late fees — Affirm and PayPal.

Afterpay charges the highest late fees on Pay in 4 plans — $10 first, followed by an additional $7 if the payment isn’t made promptly. Klarna charges the highest late fees for monthly payments at a whopping $35.

If you’re worried about late fees, stick with Affirm or PayPal. Just remember that some services may report late payments to credit bureaus, so make payments on time whenever possible.

Most buy now, pay later apps have partnered with select retailers at checkout, so you cannot simply finance at any store you wish. AfterPay, Sezzle and PayPal require you to shop with retail partners if you want to use their services.

Affirm and Klarna break that mold, allowing you to shop at any online store. Affirm goes one step further, allowing you to shop at nearly any physical retail store using a virtual credit card via Apple Pay or Google Pay.

Before you begin shopping, we recommend visiting the website of the retailer you wish to shop with and the buy now, pay later app you want to use. You may find a payment plan option with one of the buy now, pay later services mentioned above at checkout.

Alternatively, you can visit the websites of the buy now, pay later services. Each service that works only with select retailers provides a list of shopping partners you can view before purchasing.

The lack of an effect on credit scores and credit reports is one reason that customers have welcomed buy now, pay later apps.

Unlike a traditional line of credit, such services generally do not perform a hard credit check or report your balance to credit bureaus.

Out of all the services we reviewed, only one option performs absolutely no check to determine your creditworthiness — Afterpay. All other services perform only a soft credit check, which does not affect your credit score with credit bureaus. If you aren’t familiar with credit checks, check out our guide on the difference between a hard and a soft credit check.

Regarding reporting history, most buy now, pay later apps choose to abstain, but Affirm is the exception, potentially reporting payment history to one of the credit bureaus, Experian.

Which Buy Now, Pay Later Service Is Best for You?

Our favorite buy now, pay later app for most shoppers is Affirm. The financial service offers monthly and interest-free Pay in 4 financing. The monthly interest rate with Affirm is competitive with other services but is higher than potential offerings from Klarna. Additionally, Affirm has no late fees.

Otherwise, we suggest selecting the buy now, pay later service available with the retailer with which you wish to shop. All buy now, pay later services offer Pay in 4 financing options to pay over six weeks. Those looking to finance monthly need to use Affirm, Klarna or PayPal (but they will charge interest).

None of the services we looked at impacted credit scores (thanks to the use of a soft credit check) or reported to major credit bureaus. If your credit score is your primary concern, you can likely choose any of the aforementioned services without much worry.

Do keep in mind that Affirm may report payment history to Experian.

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