Updated: October 27, 2025
What’s new right now (Oct 27, 2025)
- Usage keeps rising. The latest federal survey shows about 15% of U.S. adults used BNPL in the last year—and roughly 1 in 4 BNPL users paid late at least once. Late fees are not rare.
- Heavier reliance under the hood. A recent file-level study found roughly one in five credit-visible consumers used pay-in-4, and about one in five of those were heavy users (multiple loans a month).
- Spending is meaningful. BNPL drove tens of billions of dollars in U.S. online purchases last year and is tracking higher again in 2025, with strong holiday growth expected.
- Credit reporting just got real. Affirm began reporting all plans (including Pay in 4) to Experian on April 1, 2025. If you’re late, assume it’s visible somewhere, even if not in every score yet.
- Apple Pay Later is gone. Apple discontinued it in 2024 and now surfaces third‑party lenders instead.
The big BNPL names (what they actually offer in 2025)
Affirm
Plans: Pay in 4 (0%), or longer loans (~0%–36% APR depending on merchant and profile).
Fees: No late fees.
Credit impact: All new plans report to Experian (from 4/1/25).
Best for: Clear math, no junk late fees, major merchants.
PayPal Pay Later (Pay in 4 • Pay Monthly)
Pay in 4: Interest‑free, no late fees.
Pay Monthly: 6–24 months, fixed APR (usually ~10%–36%), no late fees.
Best for: Ubiquity—if a site takes PayPal, you probably have BNPL.
Klarna
Plans: Pay in 4 (no interest if on time), Pay in 30 days, Monthly Financing (6–24 months, interest‑bearing).
Fees: Late fee may apply on Pay in 4; total late fees capped (commonly up to 25% of the order).
Best for: Fashion/retail; “try now, pay later” flows.
Afterpay
Plans: Pay in 4 over six weeks; some merchants offer Pay Monthly.
Fees: Late fees apply on Pay in 4, typically capped at the lesser of 25% of the order or $68.
Best for: Everyday retail; Cash App tie‑ins.
Zip (formerly Quadpay)
Plans: Pay in 4; virtual card option to use almost anywhere.
Fees: Late fee typically around $7 per missed installment (state caps may apply).
Best for: Broad acceptance via virtual card.
Sezzle
Plans: Pay in 4; optional Sezzle Up if you want payment activity furnished.
Fees: Late and failed‑payment fees can apply (late fee can be materially higher than others if you miss).
Best for: Smaller online shops; only consider “credit building” if you’re truly never late.
Shop Pay Installments (Shopify) — Powered by Affirm
Plans: Pay in 4 (interest‑free) and monthly installments (terms/interest vary).
Fees: No late fees on the consumer side; approvals and terms are handled by Affirm.
Best for: The millions of Shopify stores where this pops up by default.
Notables by niche (category specialists)
- Uplift (travel)
— What it is: Monthly loans embedded at airlines, cruises, and hotels.
— Fees & rates: No late fees; APR depends on the offer and your profile.
— Best for: Trips you’d book anyway—simple monthly payment shown right in checkout.
- Synchrony SetPay / Pay Later
— What it is: Pay in 4 (no late fees) and Pay Monthly (interest; capped late fee) across many retail partners.
— Best for: Big‑box and specialty retailers already tied to Synchrony.
- Bread Pay
— What it is: SplitPay (Pay in 4) and longer loans; common as a white‑label at mid‑market retailers.
— Fees & rates: No prepayment penalty; late/NSF terms depend on the loan.
- Sunbit (healthcare/auto/dental)
— What it is: Installments for dentists, vision, auto repair, and similar services.
— Fees & rates: Interest applies; marketed as no late fees.
How to use BNPL without regret (expert‑informed, plain English)
- Keep it short—and keep it to one. Six‑week, interest‑free with autopay is the cleanest use case. Problems start when people stack three or four plans at once.
- Know your fee policy before you click. If you want no late fees, stick to Affirm, PayPal Pay in 4, or Shop Pay Installments. If you use Klarna, Afterpay, or Zip, understand the late‑fee structure and the cap. Sezzle has more line‑item fees—read the box.
- Big purchase? Do the math. For 6–24 months, BNPL often runs a double‑digit APR. A 0% intro APR credit card can be cheaper and gives stronger chargeback rights.
- Returns and disputes aren’t uniform. Policies have moved toward credit‑card‑like protections, but enforcement is uneven. If a return is likely, confirm your plan pauses payments during disputes.
- Assume it’s on your record. With Affirm reporting all plans and others experimenting with data sharing, pay BNPL like it’s visible—because it increasingly is.
Bottom line
BNPL isn’t evil and it isn’t magic. Used sparingly for small, planned buys, set on autopay, it’s a tidy way to smooth cash flow at zero interest. Push it into multi‑month, interest‑bearing territory or stack multiple loans, and you’re playing debt Jenga. The latest data says more Americans are leaning on BNPL and more are paying late—so treat it like real credit.
