Zip Buy Now, Pay Later Review 2024 (2024)

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Expert take

With Zip, you can pay for almost any U.S. purchase with four equal payments over six weeks. The buy now, pay later provider is accepted at major retailers like Amazon, Target, Walmart and Costco. While it’s possible to avoid interest, there is an installment fee of $0 to $7.50 per purchase.

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Pros

• Split purchases into four payments over six weeks
• Available anywhere in the U.S. that accepts Visa
• Soft credit check won’t affect your credit score
• Good credit is not required to apply

Cons

• Installment fees are included with every payment
• Late fees of up to $7
• No monthly financing option
• Past-due accounts may be sent to collections
• On-time payments don’t help build credit

Vault’s Viewpoint on Zip

Zip is a good loan company to consider if you have a purchase you need to split into multiple payments. The service lets you make four equal payments over six weeks, making your expenses more manageable. You can pay online using the “Pay with Zip” option or by linking the Zip card to your Apple Pay or Google Pay wallet.

Zip doesn’t do a hard credit pull when you apply, which can make it more accessible. While Zip doesn’t charge interest, there is usually an installment fee with each of your four payments—similar services from Affirm, Apple Pay Later and PayPal charge neither interest nor installment fees. The installment fee with Zip is typically $1 per payment, for a total of $4, but it can be as high as $7.50 in total. There is no monthly financing option with Zip.

Zip is easy to use and widely accepted, but better options may be available, especially if you want to avoid fees. It’s also worth noting that buy now, pay later providers like Zip typically do not report to credit bureaus. This means they won’t help you build credit, even if you make all your payments on time.

About Zip

Zip (formerly known as Quadpay) is a buy now, pay later (BNPL) provider founded in Australia in 2013. The company currently has over 6 million customers across Australia, New Zealand and the U.S. More than 70,000 merchants globally accept Zip as a form of payment. In December 2023, the company announced that Zip is now compatible with Google Pay. The app is available on both Android and iOS.

Zip lets you pay for a purchase in four equal payments over six weeks. The first payment is due at checkout, and the other three will be due every two weeks until you make all your payments. For example, if you make an $80 purchase with Zip, the first $20 will be due at checkout (plus an installment fee). You then make three additional $20 payments plus the fee every two weeks until you’ve paid the entire $80 amount. Zip also lets you change your payment date, though there is a $2 fee for the change.

Who Should Get a Personal Loan With Zip?

Zip is available at nearly all U.S. retailers that take Visa cards. Due to this widespread acceptance, you might consider getting a personal loan with Zip if you struggle to gain approval from other BNPL providers. While there are fees to use Zip, the fees are minimal, especially if you make your payments on time. If you expect to make your payments within the designated six-week schedule, Zip can be a good way to get an interest-free loan.

Another reason Zip might be the right fit is if you want the option to change your payment date. You can make the change by heading into the app and selecting your next payment date on the calendar. Although there is a $2 fee for the change, the change is easy enough, and Zip might be worth considering if you want this form of flexibility.

Who Should Consider an Alternative Personal Loan to Zip?

You should consider an alternative personal loan to Zip if you want to avoid fees or harm to your credit. Accounts that are significantly past due may be sent to collections. It’s also not a good option if you want a monthly financing option or want to build credit. For instance, a 0% intro APR credit card with no annual fee may let you avoid finance charges for an extended period. On the other hand, a personal loan likely charges an APR, but these loans can also help you build credit. They can also be a good monthly financing option.

You might also want to consider alternatives if you want the option to get a refund quickly if needed. Refunds with Zip can take up to 13 days to process. Alternatives like Affirm can be much quicker, with processing times of 3-10 business days. For Apple Pay Later, refunds take up to 10 days to process.

Getting a Personal Loan Through Zip

If you’ve read our Zip review and want to try out the service, you’ll be happy to know the process can be quick and easy. Here’s how to get started.

How to Qualify for a Line of Credit With Zip

Zip is technically not a line of credit but a short-term installment loan, which can make qualification easier than other forms of financing. Generally, you must meet the following basic eligibility requirements:

• Live in the U.S.
• Be at least 18 years old
• Have a valid and verifiable mobile number
• Use a U.S. credit or debit card to make a purchase
• Have a valid U.S. mailing address

You may be able to increase your approval odds by having a consistent income and a good credit history. While these factors may not guarantee approval, they can help your chances.

How to Apply for a Line of Credit With Zip

Provided you meet the basic eligibility requirements, follow these steps to sign up with Zip:

1. Download the Zip app on Android or iOS.
2. Open the app and verify your mobile number.
3. Enter your name, email address and date of birth.
4. Add your billing address.
5. Add a debit or credit card.
6. Get your approval decision.

Zip also lets you sign up on any of its exclusive partner’s websites during checkout. To sign up, simply select Zip as your payment method during the checkout process and follow the prompts.

How Does Zip Stack Up to Its Competitors?

Zip is just one of a growing number of BNPL providers. Here’s how it stacks up to the competition.

Zip vs. Affirm

Zip and Affirm are similar in many ways, with both providers offering pay-in-four plans with 0% interest. Both are widely accepted by merchants within the U.S. Neither has a penalty for early payments. However, the similarities end there.

Unlike Zip, affirm doesn’t charge any fees for its BNPL service. In addition, it offers a wider range of payment options, ranging from pay-in-four to 48-month plans. It also offers monthly financing, which isn’t available from Zip.

One advantage Zip has is that it only performs a soft credit check. While this is true when prequalifying for Affirm, it may perform a hard credit inquiry later. Hard inquiries can temporarily reduce your credit, though the impact usually fades over time.

Zip vs. Klarna

Klarna is a Swedish company whose U.S. acceptance rate is lower than Zip’s. For instance, the company’s website says 6,000 U.S. stores accept Klarna. However, the acceptance rate is nearly 100% in Sweden, Germany and Austria, among other countries, making Klarna a good choice for travelers.

Like Zip, Klarna has a 0% APR pay-in-four plan. However, it also has a 0% APR pay-in-30-days plan. It also offers monthly financing options, including 6-24 month financing plans. Like Zip, Klarna charges late fees and may send delinquent accounts to collections.

One unique feature of Klarna is its rewards club, which lets you earn one point for every dollar you spend with Klarna. You can redeem points for discounts at offers at select merchants. Zip doesn’t offer rewards.

Zip vs. Apple Pay Later

Apple Pay Later is Apple’s BNPL service. Like Zip, Apple Pay Later lets you split purchases into four equal payments over six weeks with no interest. However, Apple Pay Later also charges no fees for its BNPL service. Purchases between $75 and $1,000 made with iPhones and iPads are eligible for Apple Pay Later. You can use Apple Pay Later anywhere Apple Pay is accepted.

Apple Pay Later has basic eligibility requirements similar to Zip’s, such as being 18 years old and a U.S. citizen. Apple Pay Later may run a soft credit inquiry, which won’t affect your credit score. But unlike Zip, Apple Pay Later says that after you make purchases, it will share your loan and payment history with credit bureaus. Thus, it’s possible to build credit with responsible use. Of course, this also means your credit score can drop if you fail to make payments.