Comparing ‘buy now, pay later’ services

Buy now, pay later (BNPL) services have become increasingly popular for consumers looking to make larger purchases and spread out payments without incurring high interest rates. With several options available in the market, it can be challenging to decide which service to use. To help consumers make an informed decision, we compared four top BNPL services – Affirm, Afterpay, Klarna, and PayPal – along with the recently launched Apple Pay Later.

Affirm offers a “Pay in 4” option with no interest fees and a purchase limit of up to $20,000. Afterpay allows users to choose between interest-free four-payment plans or monthly installments, with spending limits starting at around $500. Klarna offers a variety of payment options, including “Pay in 4” and “Pay in 30 days,” with no predefined spending limit. PayPal provides a “Pay in 4” option with no interest charges and a purchase limit of $30-$1,500.

While BNPL services offer convenience and flexibility, it’s essential to consider the potential drawbacks. Using a credit card for repayment may result in the loss of category bonuses, and accumulating debt through BNPL services can negatively impact credit scores. Responsible spending should always be a priority when utilizing these services.

For consumers looking to make larger purchases and pay over time while still earning rewards, credit cards with 0% introductory APRs and installment plans like Chase’s My Chase Plan and Amex’s Pay It® Plan It® may be more suitable options. Ultimately, the choice between BNPL services and credit card offerings depends on individual financial goals and spending habits.