Here’s what you need to know about the increasingly popular ‘buy now, pay later’ programs

SEATTLE — Back in the day, Christmas was a big time for layaways: reserve the item, pay installments, pick up after it’s paid off.

And in this tight economy, a multi-billion dollar industry is growing even more, with online “buy now, pay later” services.

“I used it to buy Christmas presents because money is running a bit tight this year,” said Trisha Brenner, of Port Angeles.

Trisha used a service called Affirm at least ten times to make purchases at Walmart. Affirm checks your credit, and customers pick the payment plan.

“You can make payments way in advance, as many months in advance as I have money to pay them. You save money on interest that way, too,” said Trisha.

Matthew Schulz, Chief Credit Analyst Lending Tree, says flexibility is key here because customers can find terms that meet their budget and stay out of long-term debt.

“You can even have ones that you can finance for three, six, nine months,” said Matthew. “But some of the more common ones are just simply four payments - one every two weeks.”

Josh Law bought his couch with a buy now, pay later plan. He says to watch out for the interest rates using these services. He’s paying almost 30 percent.

“I wouldn’t recommend it to people just because of that high interest rate,” said Josh.

Lisa Abd Rezagh used a company called Afterpay. Customers pay 25 percent upfront, get their items right away, and pay in an installment plan. There’s no upfront fees or interest.

“Why tie up your credit card when - nine times out of 10 - it’s going to have interest, which is going to have fees of some sort if you can use after pay that is interest free,” said Lisa.

Fail to pay, and customers are blocked out of the service.

Another service called Klarna allows customers to pay off purchases in four payments, each every two weeks with no fees or interest.

Quadpay offers a similar installment service, but charges $1 per installment to the consumer. They also recently released a chrome browser extension that allows users to shop almost anywhere.

“There’s a lot of differences, a lot of nuances, a lot of key details and it’s really important to do your homework before you apply,” advises Lending Tree’s Matthew Schulz.

As the number of companies offering the service has grown, so have the users.

“We are doing more transactions today, in a single day, than during Klarna’s first 4 years combined. Regularly during the day over 100 transactions per second,” tweeted Klarna CEO Sebastian Siemiatkowski on Black Friday.

Some of the services are partnering with retailers, so ask before you buy. Also look on your check out page before making a purchase. There may be a great deal you can take advantage of.

Here’s a short guide to some of the companies out there:


  • How long to pay? 6 weeks - 48 months
  • Credit check? Soft check.
  • Late fees? No.
  • Interest? 0 - 30 % APR


  • How long to pay? 3 - 4 installments.
  • Credit check? No.
  • Late fees? Up to $8 and no more than 25% of purchase price.
  • Interest? No.


  • How long to pay? 4 installments over 6 weeks
  • Credit check? Soft check.
  • Late fees? Up to $7.
  • Interest? No.

Paypal Pay in Four

  • How long to pay? 4 installments over 6 weeks
  • Credit check? No, but must have a PayPal account in good standing.
  • Late fees? Yes, unspecified amount.
  • Interest? No.


  • How long to pay? Three plans offered: 4-payment installment plan, pay full amount of purchase in 30 days, loans up to 36 months.
  • Credit check? Hard checks for longer-term credit plans.
  • Late fees? Up to $7 for 4-payment installment plan. Up to $35 for loan. Late payments result in ban from “Pay in 30 Days.”
  • Interest? Yes for longer-term credit plans.


  • How long to pay? 4 installments over 6 weeks.
  • Credit check? Soft check.
  • Late fees? Late payments result in frozen accounts, and Sezzle requires a $10 reactivation fee to use the service again. You can pay $5 to delay an installment payment up to two weeks.
  • Interest? No.

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