Buy Now Pay Later apps: how they work, are they safe, & what apps to use

Buy Now Pay Later apps: how they work, are they safe, & what apps to use

With prices rising everywhere, Buy Now Pay Later (BNPL) options are looking better than ever.

But are they a good option for you?

Surprisingly, the answer is yes.

Of course, that “yes” comes with a few stipulations, which I will get into, but overall I found that these companies can help make large purchases easier, especially for those with less than perfect credit.

As long as you shop within your means and don’t go on a mindless shopping spree, these companies can really be an asset.

To help you navigate the world of Buy Now Pay Later and make the most of your money, read on to understand how it works, what to look out for, and a comparison of the main BNPL companies.

I’ll also throw in some useful tricks to help you maximize your purchase options.

How It Works

Buy Now Pay Later is simple and works like a hybrid of lay-a-way and a short-term loan.

You can make a large purchase and break it up into multiple payments. Payments are usually spaced 2 weeks apart, with the first payment due at the time of purchase.

Unlike lay-away, you get the item as soon as you make that first payment.

Payment is made by connecting a debit, credit or bank account to the company and payments are debited automatically.

To use the service, you download the Klarna, Zip, or any of the other BNPL apps.

Once you register and are approved, you search their site for the store you want and when you check out, you pay through the app.

The BNPL app creates a one-time virtual “card”(complete with an expiration date and security code) for the amount of the purchase, and you pay online or at the store with it.

For example, if you use the Klarna app and want to pay for purchases while in Walmart, you can go to the app and create a card for the amount you need. Then you can enter the virtual card into the Walmart app and check out using Walmart pay.

Also, if a store has a sign saying they accept Zip or Klarna, you can go to the app, put in your purchase amount, and present the virtual card to the cashier.

Online, you simply go to,,, etc, and when you check out, it will give you the option to pay with Affirm, Klarna, etc.

Pros & Cons

Now that you have an overview of how this works, let’s look at how these companies can help or hurt you.


  • With most of these BNPL companies, payments are interest free as long as you pay in the allotted time. So if you need new clothes for work or a new washing machine, you can do it and breathe a little easier.

*Fun Fact: with Klarna, if you have an upcoming payment, you can extend it by a week, provided you haven’t extended a payment for that purchase before. And they do this with no penalty.

  • You don’t need good credit, or any credit. One of the big draws for these loans is you get approved even with a bad or no credit score. If they do a credit check, it’s a soft one, so it doesn’t hurt your score.  It’s just about impossible with a traditional loan to get approved, let alone get approved with no interest. This gives the working class a fighting chance.
  • Some BNPL companies like Affirm, PayPal and Klarna, offer long-term loan options, between 3-48 months; and some of those options have 0% interest! For a larger purchase like furniture for a new place, this can be an easy way to pay it off and avoid interest.
  • BNPL companies can help not just with items you want, but ones you need, like a computer for work or even groceries. I know of several single parents who were struggling during the pandemic and thanks to Klarna they were able to put groceries in their fridge.

*Fun Fact: After the past 2-years we all want to have some fun, even if we can’t afford it in the moment. My co-worker booked a vacation that she otherwise could not afford to take her kids on using Zip (Quadpay). It allowed them to have a great few days in the sun without needing a big payment for the hotel stay.


  •  You can overspend. Because payments are broken up into smaller amounts, you may take on more payments than you can afford. An example: you’re short on money and buy a $300 iPad (4 payments of $75) with Klarna. Then you make a $500 purchase for a new couch (4 payments of $125) and a $200 purchase for clothes (4 payments of $50). Now in 2 weeks you have to pay $75 + $125 +$50, which equals $250. If you couldn’t afford the original $300 for the iPad, those 3 payments coming in at the same time could make things tough.
  • It could affect your credit; while you don’t need good credit, most of these companies will do a soft credit check. This will not affect your credit score, but if you are approved and miss payments, that CAN affect it. Missed payments can be reported, causing your score to dip.
  • Hidden fees/loss of credit: if you are late, you can get charged a late fee or even interest in some cases. Afterpay and Klarna will give you a 7-day grace period before assessing a late fee, while Affirm and PayPal will not charge late fees. However, Klarna will suspend your use if you are late, or may lower how much you can borrow going forward.
  • How much you are approved for does depend in part on your credit score and payment history. I say in part because there doesn’t seem to be one formula for all the companies. When I signed up with Klarna I was approved for $1500 dollars; Quadpay (now called Zip) however,  initially approved me for  just $425.
  • You could pay interest. Some, like Affirm, can charge up to 30%, and while they will tell you before you commit, if it’s your only option it may not be as good a deal as you think.

Buy Now Pay Later Companies


* Best overall due to flexibility in payments and purchase power.

Klarna can be used just about anywhere, which is why it’s my first choice. You can use it for clothing, electronics, appliances, hotels, broadway tickets, even your phone bill!!! I tested it for this article and paid my phone bill using a Klarna card.

When you go on the app you can search any site and if it doesn’t come up, the Klarna app will let you Google search it. Once you bring it up, the “Pay with Klarna” will appear on the bottom and you can use it.

Payments: with Klarna you have a few choices:

You can break payments into 4 interest-free payments every 2 weeks.

You break it into 6 payments, which gives you smaller payments over a longer period (6 payments every 2 weeks), but this option has interest.

There is a Pay in 30, where you have 30 days to pay, starting from when the order is shipped. This gives a bit of flexibility, particularly with clothing purchases. You can order, try them on and return them if they don’t fit without making a payment.

Finally, there is a long-term, 6 to 36 month finance option. For this you need to apply like you would with a credit card.  It has a 19.99% interest rate, but there are no annual fees and you don’t get charged additional interest if you don’t pay your balance by the end of the term.

Zip (formerly Quadpay)

Zip is another good BNPL choice and works like Klarna.

It also can be used at just about any site thanks to the Google search feature, making it a top choice.

The only downside is there is no flexibility in payments. If you miss one, you are assessed a $10 fee (up to 3 times per purchase) and purchase power is temporarily halted.

Payments: Zip only offers a 4-payment installment plan, with no interest.


*Simple process but limited retail access.

AfterPay’s website is easy to use and there is no credit check, which would be great, except they are not used in a lot of retail stores.

They are available in some clothing, beauty, and fitness stores, but many recognizable names are missing, like Target and Walmart.

Payment: AfterPay offers a pay in 4 installments, interest-free payment plan.

Sometimes the first installment payment will be higher than the other 3, but AfterPay will tell you before your purchase.

Like Klarna, you can extend your payment due date, as long as it’s done with more than 24-hours notice of the existing payment date.  For some purchases, you can move the 2nd or 3rd payment once per order.

*New AfterPay users cannot move payments for the first 42 days. Also, you will be charged a late fee if you miss a payment, usually after 10 days, and purchase power will be suspended.


*Best for those with good credit and for larger purchases.

With Affirm you can either go to their site or apply at checkout on a website where Affirm is an option. Affirm does a credit check and they’re approval is more akin to that of a traditional loan.

If you are approved they will tell you for how much, the interest, ranging from 0-30% APR, and your payment terms, which can be from 3-48 months.

Payments:  Affirm does not hit you with late, annual, or prepayment fees, but there is interest.

As you can see, there are good and bad points to all of these companies, but the bottom line is if you use your head they can be viable options.

Have you used any of these services?

If so tell me about your experience below.

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Author Profile: Consumer Expert Tracy Ortiz

I am a mom to 2 little boys: a 10 year- old and an 8 year-old and they are the only things I love more than writing. I am an avid reader, a big sports fan and love a good deal. Most of all, I love keeping up on the latest consumer news and sharing my findings with all of you. When I'm not writing I'm painting- check out my latest in my shop:

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