Afterpay Reviews – Pros and Cons in 2023
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.
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.
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:
- Sign up for an Afterpay account
- Get approved
- Shop at your favorite stores
- Choose a payment plan
- 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:
- Bed Bath & Beyond
- American Airlines
To find all the places that accept Afterpay, look for the shop directory section.
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.
What are Afterpay Pulse Rewards?
Now, no Afterpay review would be complete without explaining what Afterpay Pulse Rewards is.
Afterpay Pulse Rewards is a program that rewards Afterpay customers for responsible spending and on-time payments.
For each eligible payment made on-time, Afterpay rewards you with 10 points. Instead of getting cash back, these points allow you to access higher rewards tiers with benefits like zero downpayment checkouts and exclusive discounts at your favorite stores.
Here’s a summary of all Afterpay tiers as well as the benefits that come with them.
|Gold (0-99 points)||Platinum (100-299 points)||Diamond (300-499 points)||Mint (500+ points)|
|Welcome offer||Yes||Not available||Not available||Not available|
|Exclusive discounts||Not available||Yes||Yes||Yes|
|No downpayment is required (for eligible purchases)||Not available||Not available||Not available||Yes|
|Delay payment date – up to seven days||Three times a year||Three times a year||Six times a year||Six times a year|
|Early access to discounts||Not available||Not available||Yes||Yes|
|Buy gift cards with Afterpay pay in 4||Not available||Yes||Yes||Yes|
In addition to getting 10 points for each on-time payment, you can earn points for completing these shopping tasks:
- Downloading the Afterpay app = 20 points
- Making your first in-store purchase = 20 points
- Making a second purchase = 40 points
- Shopping from a sustainable business = 20 points
- Shopping from a small business = 20 points
How to Join Afterpay Pulse Rewards
Joining Afterpay Pulse Rewards only takes a few minutes if you’re already shopping with Afterpay.
First, download the Afterpay mobile app. You’ll see a “Rewards” tab as soon as you open the app. Select this tab, and you’ll find a button that says “Join for Free.”
Click this button to automatically start accumulating points for on-time payments. It’s as easy as that!
Note: Afterpay Pulse Rewards is only available in the Afterpay mobile app and must be version 1.36.0 at minimum.
How Does Afterpay Pulse Rewards Work?
Afterpay rewards you for being a responsible consumer. You earn 10 points for every on-time payment made for orders over $40 in the U.S.
Each purchase requires four payments. So you’ll get the opportunity to make four on-time payments worth 10 points each. This means you can earn up to 40 points for every eligible purchase!
Pulse Rewards points accumulate over a six-month period and reset every six months.
The points you earn within these six months will determine your tier. For example, if you earn 150 points, you’ll be placed in the Platinum tier. And if you earn 350 points, you’ll be in the Diamond tier (see table above for full breakdown).
Once you unlock a new tier, the benefits of the new tier will be available to you immediately. You’ll have access to them for the remainder of your six-month period plus the following six months.
You can utilize a tier’s benefits as long as you earn enough points to maintain your tier status. But if you aren’t earning enough points, you’ll lose tier benefits in the subsequent eligibility period.
Here’s an example to make things simple:
Let’s say you made your first Afterpay purchase on the 10th of January and signed up for Afterpay Pulse Rewards on the 25th of January.
Your eligibility period will start on the first day of the month you created your account (i.e., the first of January). This means that the points you’ve gathered from the 10th to the 25th will still count.
Your eligibility period will run from the first of January to the end of June (6 months). The next eligibility period will start on the first of July and run until the end of December.
If you accumulate 100 points on the 25th of March, for example, you’ll access the benefits of the Platinum tier on that day until the end of the following eligibility period, which would be on the 31st of December.
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.
Here are screenshots of positive Afterpay reviews:
These Afterpay reviews talk about how you can use the app at most retailers.
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.
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.