Afterpay Reviews – Pros and Cons in 2023

view of afterpay review form mobile
Some of the links in this post are from our sponsors, and we might earn a commission if you click on one.

Considering using Afterpay to Buy Now, Pay Later? I’ll help you decide if Afterpay is worth it for your situation!

Consumers are realizing the dangers of credit card debt. The average credit card interest rate in the US is currently 16.27%, and this figure is only expected to increase.

So if you’re looking for a zero-interest alternative to credit cards, don’t worry. I’ve got you covered.

In our Afterpay review, I’ll answer all your questions about this buy now, pay later service. I’ll also provide some shopping tips to help you use Afterpay responsibly.

What Is Afterpay?

Afterpay is a buy now, pay later (BNPL) app that allows you to purchase items and pay them back over six weeks. This interest-free payment plan is a good option for consumers because you aren’t paying more than you borrowed.

It’s almost like a free personal loan.

User dashboard view for Afterpay review
View of the easy-to-navigate user dashboard in the Afterpay buy now, pay later app. Source: Afterpay

But whenever I hear something is free, I get suspicious.

So, what’s the catch? 

How Does Afterpay Make Money?

I always assumed that Afterpay earns money by charging late fees. But Afterpay’s financial reports show that only a fraction of their revenue comes from late payments.

Afterpay makes its money by charging fees to merchants. These merchants pay around 6% to offer Afterpay to their customers. 

So let’s say you buy something for $100; Afterpay gives the retailer $94 immediately and collects the full $100 from you over six weeks.

So why would retailers use Afterpay? It’s because paying smaller installments is easier to budget for some folks than paying $100 immediately. This encourages customers to shop more. Afterpay even states that shoppers who use their service spend 40% more than those who don’t.

explanation of how afterpay is benficial for both customers and merchants
Afterpay allows customers to receive items right now and pay over time without interest. Afterpay charges the store for their service. Source: Afterpay

It’s easy to see why this is attractive to merchants. However, it does come at your expense.

This is why I don’t recommend using Afterpay regularly, as it’s easy to buy more than you need. Instead, only use Afterpay and other buy now, pay later apps to purchase once-off items. 

How To Use Afterpay

Thinking about giving Afterpay a shot? Here’s my five-step process on how to use Afterpay without hiccups:

  1. Sign up for an Afterpay account
  2. Get approved
  3. Shop at your favorite stores
  4. Choose a payment plan
  5. Pay your installments 

Step 1: Sign Up For An Afterpay Account

Sign up for an Afterpay account by downloading the app in the App Store or Google Play store.

You’ll need to type in your full name, email address, and phone number, and Afterpay will send you a confirmation text. Once you’ve confirmed your phone number, enter your US street address and preferred payment method, and verify your identity.

From here, Afterpay conducts a soft inquiry, but it doesn’t matter if you have a zero credit score. Afterpay isn’t looking for anything specific; they are just trying to approve your account.

Step 2: Get Approved

Afterpay offers instant approval, so you won’t have to wait several days before using your account. But there are some disadvantages to this. 

For instance, Afterpay regulates your purchases more than most buy now pay later apps. Let’s say you signed up for an account and want to buy expensive jeans. Upon checkout, you might learn that Afterpay rejected your purchase because you don’t have a long enough buying history.

So, while approval is immediate, you must build trust with Afterpay by purchasing small products first. This can be a significant drawback.

Step 3: Shop At Your Favorite Stores

Now that you’re set up, it’s time to shop!

Afterpay works at popular retailers like:

  • Target
  • Nordstrom
  • PetSmart
  • Bed Bath & Beyond
  • Nike
  • Levi’s
  • American Airlines

To find all the places that accept Afterpay, look for the shop directory section. 

afterpay review of stores available to shop in the app
With Afterpay, you can buy everything from clothing to travel. Source: Afterpay

Step 4: Choose A Payment Plan

Unlike other apps that offer one payment plan, Afterpay is flexible. While the 25% every two weeks payment plan is most common, Afterpay also has six and 12-month personal loans for items over $400. 

These longer-term plans have interest rates that vary depending on your credit score and monthly income. 

But the same 25% cap on late fees still applies. So even if you’re late, you won’t experience the infamous debt snowball effect you get with most credit cards and buy now, pay later apps.

Step 5: Pay Your Installments

The last step is paying your installments. Afterpay loans come with autopay, so you won’t have to set it up every time you shop online. This is handy if you bought items using various payment plans and need help keeping track of everything.

You can also contact the customer support team to work out another plan if you think you’ll miss your next payment. Many Trustpilot reviews talk about how the support team is friendly and quick to respond to emails. All you have to do is notify them of your situation, and they’ll shift your payment date.

Is Afterpay Legit?

Afterpay is a legit personal loan company governed by the Payment Card Industry Data Security Standard (PCI DSS). This is the same standard that credit card companies are judged on, so you won’t have to worry about any fishy activities.

Afterpay is also a publicly-traded company. This means they have to make all their financial documents public, increasing transparency and reducing the likelihood of unfair business practices.

Afterpay was founded in 2014. In 2021, Afterpay was bought by Block, the same company that owns Square and Cash App.

Is Afterpay Safe?

Afterpay is a safe company because even though they collect sensitive data like credit card information, full names, and email addresses, they must adhere to ISO 27001, a strict data security standard. This gives you peace of mind knowing your data won’t land in the wrong hands.

Afterpay Reviews

Here are screenshots of positive Afterpay reviews:

online customer review of afterpay
Positive review of Afterpay buy now, pay later app
positive customer review of afterpay
Five-star review of Afterpay from customers who has found the app very helpful

These Afterpay reviews talk about how you can use the app at most retailers.

online customer afterpay review expressing how the app is for everyone
This customer believes Afterpay has shopping solutions for everyone!

I found that many Afterpay reviews state that you can’t use American Express to pay your account, which can be annoying. But this may change in the near future.

customer Afterpay review explaining that app doesn't accept American Express
Customer explains their only complaint with Afterpay is that they doesn’t accept American Express

Regarding bad Afterpay reviews, most users talk about Afterpay rejecting their purchases because they don’t have a buying history yet. But this is a feature of the app, and you’ll need to build an Afterpay history before making large purchases.

Commonly Asked Questions About Afterpay

How Trustworthy Is Afterpay?

Afterpay is a trustworthy app because it’s regulated under the Payment Card Industry Data Security Standard (PCI DSS), the same standard to which credit card companies adhere. Afterpay is also a publicly traded company, so you can view its internal financials online.

What Is The Downside Of Afterpay?

A big downside of Afterpay is the late fees. Afterpay gives you 24 hours after the deadline to pay your account, or they’ll charge $10. They’ll charge another $7 if you can’t pay the total after seven days. So if you miss all payments, you’ll pay $68.

Does Afterpay Hurt Your Credit?

If you don’t pay your account in time, Afterpay reserves the right to report you to the credit bureau. Although it’s pretty easy to work out another payment plan with the support team, you can expect your credit to take a hit if you’re missing payments by several months.

How Does Afterpay Work?

When you buy something with Afterpay, you pay 25% of the purchase price today and 25% every second week until your loan is paid off. Afterpay makes money by paying the retailer 94% of the total upfront and collecting payments from you.

Where Can You Shop With Afterpay?

You can shop with Afterpay at stores like Adidas, Kmart, Gilt, and Calvin Klein. To find all the retailers you can shop at, download the mobile app and head to the shop directory. 

Is Afterpay Like A Credit Card?

Afterpay is like a credit card with zero interest. You don’t need a credit score to get approved, but Afterpay doesn’t report on-time payments to the credit bureau, so it won’t help you build good credit.

Does Afterpay Affect Your Credit?

Afterpay only affects your credit if you’re missing payments by several months. So if you can’t make a payment, contact the support team, and they will work out a plan for you without reporting anything to the credit bureau. 

Is Using Afterpay A Good Idea? 

Using Afterpay to make large, one-off purchases is a good idea because you can get the item now and pay it off over six weeks. But this can quickly get overwhelming if you’re buying several smaller items since Afterpay will constantly be withdrawing what you owe from your account.

What Are Afterpay Alternatives?