If you’re worried about overspending this holiday season, you may feel like buying on credit could make the problem worse. And just a few years ago, you’d have been right.
Traditional creditors charge hefty interest on purchases and overdraft fees bring firms billions of dollars in revenue each year.
But if you think those are the only options, you’ve probably never heard of Buy Now, Pay Later (BNPL).
BNPL services allow you to split your purchases into more manageable amounts and pay them at agreed-upon instalments.
- Interest rates range from 0% to 19.9%.
- Fees are typically £0 but vary depending on the retailer.
- Credit checks can be soft (with no impact on credit score) or hard (impacting credit score).
- Penalties for missed payments vary depending on the provider. They may either charge interest and fees or suspend your account.
- Retailers vary depending on your provider. BNPL providers are rapidly expanding their partnerships as BNPL services become increasingly in-demand.
How Three of the Top BNPL Services Stack Up:
More on Zilch
There are several features that set Zilch apart from other BNPL services.
- Earn 2-5% cash back.
Pay in full for your purchase using your Zilch card and earn the highest rate of cash back rewards in the UK.
Families earn £870 per year on average!
- Tap and pay anywhere.
Zilch is the only BNPL service that can be used online and in-store, anywhere that accepts MasterCard.
- Commitment to responsible lending.
Instead of charging predatory fees and interest rates, Zilch places a hold on your account when you miss a payment.
In order to protect you from potential fraud or theft, Zilch requires you to pay your first purchase in full before you can begin making more.
- A Snooze or a Boost if you need it.
Zilch’s Snooze feature allows users to place a temporary hold on their payments for a few days.
The Boost feature allows users to make purchases over their spending limit, provided they pay the total amount that exceeds their limit at the time of purchase.
The sign-up process for Zich takes 3 minutes and requires only a soft credit check, so your credit score won’t be impacted. You’ll be assigned a spending limit, which is typically between £100-£600.
Shopping with Zilch
Zilch makes it easy to shop with their app. Shop partner brands with no fees or tap to pay anywhere that accepts MasterCard.
Making Your Payments
Zilch offers a universal payment plan that ensures all your purchases will be paid off in 6 weeks.
The plan breaks your purchase into 4 equal payments and charges your account biweekly. You will receive a notification a few days before each payment is due.
The process for making a £160 purchase looks something like this:
October 1st (the time of purchase):
You pay £40 at the checkout. The remaining balance is £120.
October 15th (2 weeks after purchase):
A payment of £40 is charged to your account. The remaining balance is £80.
October 29th (4 weeks after purchase):
A payment of £40 is charged to your account. The remaining balance is £40.
November 12th (6 weeks after purchase):
A payment of £40 is charged to your account. Your balance is paid.
Zilch: The UK’s Best BNPL Provider
Zilch is one of the fastest-growing UK BNPL providers, and with all these features, it’s easy to see why.
- The highest rate of cashback rewards available in the UK, earning families an average of £870 per year.
- The only BNPL that can be used in-store anywhere MasterCard is accepted.
- Most consumer-friendly BNPL service with no hidden fees and absolutely no interest.
Signup takes only 3 minutes and won’t impact your credit score.
Kirsten Anderson is a freelance tech writer from Edinburgh. She specializes in creating content that promotes Gen Z financial literacy as well as in-depth coverage on innovations in the finance industry.