Amazon is considered the leading online retailer in the United States. It has retailed over $469.8 billion in 2021, which is almost 22% extra compared to the previous year. Amazon has become the 6th largest e-commerce retailer company in the world. Amazon not only offers a single product or retailing offer, but it has a massive variety of products, services, retailing options, benefits, and useful perks.
Amazon has its credit cards for multiple needs. The company started offering its shoppers the availability of delaying their payments with the new emerging feature called “buy now, pay later.” Shoppers can easily make full purchases and delay payments through this amazing service. It is a great option if you need to buy products and don’t have sources to pay on time.
This article will provide you with details about what Amazon BNPL is, how it works, and the advantages and disadvantages of using it. Also, we will provide some alternatives and frequently asked questions about Amazon’s buy now pay later service.
What Is Amazon Buy Now Pay Later?
Amazon buy now pay later is a service for shoppers to make purchases for items they need now and make payments later without any interest. It is an amazing service that provides you ease for buying products on time and paying for them later. Shoppers can use Amazon BNPL to make purchases on Amazon online, book travel tickets, pay off their utility bills, and many other things.
Among the establishments, Amazon progressed greatly as a global e-commerce retailer. With time, it initiates multiple services and features for shoppers to provide them benefits. Its buy now pay later feature is helping many people to buy at the moment and pay later. It allows the shoppers to fully pay the next month or divide their payments in installments.
Amazon has started its buy now pay later service in partnership with IDFC First Bank or Capital Float Bank. These partners require a shopper’s credit history and credit limit to qualify him for this service. The partner bank is in charge of qualifying the shoppers according to their credit history and credit limit.
Eligibility Criteria for Amazon Buy Now Pay Later
Amazon does not mention the eligibility criteria depending on the account details of the shopper. However, your eligibility on the company’s site must be checked according to your credit limit and credit history. Amazon does not allow its buy now pay later feature to users for business purposes. Shoppers can use BNPL monthly payments for household, family, and personal objectives.
The company checks your credit score and credit history, financial goals, spending habits, spending behaviors, and financial review of your Amazon account. Once you are eligible to use Monthly Payments, you can buy now and pay later on a wide variety of products and open orders according to the company’s decision.
Who Should Use Amazon BNPL
- Shoppers who frequently shop at Amazon.com do not care much about additional costs.
- Shoppers who want to make their large purchases in installments.
- Shoppers who are interested in keeping an eye on their purchases and repayments.
Who Should Not Use Amazon BNPL
- Shoppers who are interested in paying full purchase amounts.
- Shoppers who fail to balance their spending and budget.
- Shoppers who are in fear of late payment penalties.
Products Eligible for Amazon Buy Now Pay Later
Amazon offers its buy now pay later service eligible on certain items. The list of products is not short; a wide variety of items are eligible for the BNPL service of Amazon. Also, to avail of the BNPL service, shoppers must spend a minimum of $50 per order.
There is a list of products that you cannot apply BNPL service:
- Digital products and content
- Out-of-stock items (even if it says “available soon”)
- Amazon.com gift cards
- Vehicles
- Coins
- Collectibles
- Products bought from an outside retailer other than Amazon
- Amazon Prime subscriptions, Subscribe & Save, and Recurring Delivery orders
- Grocery items
- Prescription medication
How to Use the Amazon Buy Now Pay Later?
After checking your eligibility for Amazon BNPL, you can apply for the service. After qualifying for Amazon Pay Later, you can easily avail of the service. You can buy products online at Amazon.com and pay the amount later. You must set the Amazon Pay Later service as a default payment method at checkouts.
Amazon’s Buy Now Pay Later scheme will allow you to buy products and pay for them later in the next month or installments. The term period for installments ranges from 3 months to 12 months. So you can easily divide your payments into equal portions and pay accordingly. You can keep an eye on your purchases, repayments, and purchase limits with the dashboard of the Amazon BNPL payment plan.
How to Apply for Amazon Buy Now Pay Later
If you have qualified for the Amazon Pay Later service, you can easily apply for the service. Follow the given step-by-step guide to applying for the Amazon BNPL scheme:
- Step 1: Download the Amazon app on your iOS or Android device.
- Step 2: Search for Amazon to make online purchases.
- Step 3: Choose your purchase items and add them to the cart.
- Step 4: Select the application you use for the BNPL service at checkout.
- Step 5: Your purchase amount will be split into equal installments.
You can now easily make your purchases in installments. If you collect more than your installment, you can pay a high amount for your purchase to avoid late payments or missed installments.
Pros and Cons of Amazon Buy Now Pay Later
Amazon BNPL service has many advantages for shoppers. Look at the highlights of the pros and cons of Buy Now Pay Later and then detailed notes on each advantage and disadvantage.
Pros of Amazon buy now pay later are as follows:
- The service does not require a credit card.
- The service provides flexible repayment options.
- There is no interest or hidden fees for using the service.
- There are no pre-closure charges for the service.
- The service provides simplified tracking of expenses.
- Amazon BNPL’s Lenders will provide an instant decision for the required credit limit.
Interest-Free Periods
Shoppers who are good at paying their payments on time are more likely to qualify for the buy now pay later service of Amazon. Amazon does not charge any hidden fees or interest on monthly payments with the buy now pay later service.
You can choose term periods for your payments. You can make payments in the next month from the purchase date. Also, you can choose the installment program. The EMIs are for 3 to 12 months. It’s great for shoppers who know how to take advantage of interest-free periods.
Zero Interest Plans
Then the interest plans of Amazon BNPL service depend on the application you use for your purchases. Multiple applications offer to buy now, pay later service without linking the interest with payments. It means you will pay your payments without interest from your first installment to the last one.
Shoppers can get benefits from this service by making their payments on time. If you fail to pay your bills or other payments on time, you will be charged with a late payment penalty or missed installment fee. It is better to make payments on time, avoid late payments, and enjoy interest-free payments.
No Hard Credit Check
Amazon’s buy now pay later scheme is eligible for shoppers without any credit card. If you don’t want to use a credit card, you can still use the Amazon BNPL service. As the application service for a credit card is not simple, and all credit cards are not available for every shopper, Amazon offers its buy now pay later service to shoppers without a credit card.
Also, the Amazon BNPL service does not require a hard credit check if you are a credit card holder. Although, some insurer of BNPL service does a hard check for qualifying a shopper. But you can apply for a BNPL app with a soft credit check. You should reduce the number of checks on your credit history so your credit score remains good.
Instant Decision of Credit Limit
If you are eligible for the Amazon buy now pay later service, the lender will decide your credit limit. It means you will provide a dashboard of your spending with Amazon BNPL. So you can easily know how much you can spend with BNPL according to your budget.
Convenient and Efficient
Amazon BNPL offers convenient and useful plans compared to other loans or schemes. Shoppers can make their payments by using a single application. There is no need to install different applications to perform their payments and get their account details.
Qualifying, making payments, and getting benefits from the Amazon buy now pay later scheme is easy and simple. It does not require many days to process the whole process. This service’s requirements and payment options are similar to other BNPL providers.
Ease of Cash Flow
Another advantage of Amazon BNPL service is managing a balance between purchases and budget. A shopper of Amazon can balance its buying products according to its budget. He can plan for all the products he needs while keeping an eye on the budget.
With the BNPL scheme, you can track your purchases, spending, and credit limits on simple terms. The service enables you to balance your spending and financial resources. So you easily take a deep view of what you are spending and what your budget is.
Split Payments
For using Amazon’s Buy Now Pay Later service, there are two options for making payments. You can make full payments or split the payment into installments in the next month. Installment amount makes your work easier than your think.
Suppose you must make an expensive purchase and can’t pay the amount at once. You can split your payment into equal portions and pay them accordingly. So, the feature enables you to make your life easier and more comfortable.
No Specific Requirements
Applying for Amazon’s buy now pay later service is simple and requires no specifications. You are not required to provide a good or excellent credit score. Lenders usually give a soft check to your credit history and your spending habits to ensure whether you can make payments on time.
You are required to provide your credit history and score only at the time of account opening. Later, there is no need to manage your credit for using the service. People with fair or low credit also apply for the scheme. Also, there are no other requirements to open an account; everyone can avail of the Amazon BNPL feature.
Cons of Amazon buy now pay later are as follows:
- The service is not available for everyone.
- You cannot make large payments of bills at a time.
- The service is not eligible for all purchases.
- The service charges a late payment fee if you fail to pay on time.
- Missed installments for Amazon BNPL will lead to a lower credit score.
High-Interest Rates
The interest rates of BNPL service depend on your application. Some BNPL providers offer flexible interest rates fixed on the application agreement. At the same time, others offer interest-free periods for a limited time. As the time ends, you need to pay interest on your payments.
Also, if you fail to make your payments on time, you will be charged with high-interest rates. The percentage of these interest rates can vary over time. It can increase with more late payments, and it can also decrease with timely repayments.
Late Fees
Amazon’s Buy Now Pay Later service charges a late payment penalty on late payments. Shoppers who fail to make timely payments for their purchases under Amazon BNPL have to pay late payment fees. There can be several reasons for late payments.
Sometimes, shoppers face insufficient funds or any other factor. Lenders would charge late payment fees if you missed a payment. The interest of this fee will increase and decrease according to your payment habits. If you maintain your payments on time, the interest rate will decrease.
Small Credit Limits
All Amazon Buy Now Pay Later providers are different from each other. Some providers offer small-scale purchases, which allow shoppers to limit their purchases. With small-scale purchases, you cannot buy an expensive product that crosses your purchase limit.
Although Amazon BNPL offers installment plans, you must keep track of your purchase limit decided by your BNPL provider. Also, if you don’t pay your installments on time, you will charge a high-interest rate that will be expensive.
Don’t Build Credit
This is not a good option if you consider building your credit score with the Amazon buy now pay later feature. Amazon BNPL does not help in building a good credit score. Unlike credit card issuers, the report of your on-time payments and installments is not sent to credit bureaus.
Some BNPL providers consider on-time payments a good thing for a trustworthy environment, but it is not the case with all BNPL providers. Lenders will report your late payments and debts to credit bureaus, leading to a bad credit score.
Terms May Vary
Amazon BNPL service system runs on different terms. Some providers offer an interest-free period for BNPL loans. In contrast, others provide BNPL offers without any interest. You can also find borrowers who offer high-interest rates or late payment fees.
If you are making purchases for expensive products, you may have difficulty paying late payment fees or missed installment fees. It is good to maintain payments on time, so you can enjoy your Amazon buy now pay later service.
Overspending Consequences
Shoppers who do not keep their purchase limits in mind face late payment fees or missed installment fees. To get the best out of Amazon BNPL, shoppers must consider their purchasing power and spending according to their limits.
If you fail to make your payments on time, the lender will charge you a late payment penalty. Also, a report about your missed payments, late payments, and debts will send to credit bureaus. Consequently, you will face damage to your credit score, and you will not be allowed to buy any loans.
Alternatives to Amazon BNPL
Like Amazon, some other useful online e-commerce retailers offer the Buy Now Pay Later service. There are several BNPL providers, such as Zip (Quad pay), Afterpay, Affirm, Sezzle, and PayPal. You can consider the following options if you want an alternative to Amazon BNPL.
1. Affirm
Affirm is an emerging e-commerce retailer offering the Buy Now Pay Later service. It does not charge a late payment fee on missed installments and late payments. It takes interest rates ranging from 0% to 30% according to the shopper’s payment amounts.
Affirm also provides the option of refunding the purchase amounts. However, if you pay interest on the payment before refunding, you will not get your interest amount. Shoppers can apply for loan amounts of more than $17,500 on all purchases.
Affirm works with different merchants such as Peloton, Target, and Adidas. Shoppers can use the Affirm BNPL service via the Affirm application or Affirm.com. Its BNPL service is available online or in-store under the supervision of the company.
2. Afterpay
Another alternative to Amazon BNPL is Afterpay. Afterpay is a loan provider, and e-commerce retailer that offers a Buy Now Pay Later service to its shoppers. It charges a late fee of $8 or 25% on missed installments and late payments. It does not take any interest rates.
Afterpay offers a loan option of four installments with a term period of 6 weeks. Shoppers can easily manage their payment amounts in one and a half months. The term period of Afterpay is lower than the Amazon BNPL service.
Afterpay also provides the option of refunding the purchase amounts. For availing of this offer, shoppers must visit the merchant first and then apply for the refund policy. You can also get partial refund options according to your requirements. After not running a credit check, shoppers are not required to provide a good or excellent credit score.
Afterpay works with more than 100,000 merchants all across the world. Shoppers can make their payments through the Afterpay card. Shoppers can use the Affirm BNPL service via the company’s application or website. Its BNPL service is available online or in-store.
3. Sezzle
Sezzle is another alternative for Amazon BNPL. It offers no interest rate on all products and services. It offers loan terms for 6 weeks only. If you want to make installments for your purchase amounts, you can pay repayments in 4 installments.
Sezzle does not charge additional fees if you fail to make on-time purchases and installments. It will charge you a late payment penalty of $10. The fees can also vary with your state’s rules and regulations. You can change the schedule of your payments without any fee. This fee can be $5, depending on your state’s regulations.
Shoppers are required to contact the merchant to use the return policy of Sezzle. The merchant will then send your refund to Sezzle, and the process will proceed. Once the policy is applied to your payments, Sezzle will cancel all your future payments. And your past payments will transfer to your original payment method.
Sezzle has more than 41,000 active merchants, including GameStop and Target. Shoppers can take loan amounts with Sezzle for the order limit of $25,000. It also does not send any credit reports to credit bureaus. So the credit score of shoppers will not affect in any way. If Amazon BNPL service does not offer flexible benefits to you, you can use Sezzle for a better Buy Now Pay Later Scheme.
FAQs
Some frequently asked questions about Amazon’s Buy Now Pay Later service are as follows.
Does Amazon Buy Now Pay Later Affect the Credit Score?
Amazon BNPL service does not put a good impact on your credit score. Some shoppers use the BNPL service to build their credit score, but it’s not a good option. If you are paying your payments and installments on time, your lender will not send any good performance report to credit bureaus. So your credit score will remain the same as it is.
However, late payments and missed installments can cause damage to your credit score. If you miss a payment and fail to pay on time, your lender will send your debts and late payment schedule to the credit bureau, resulting in bad credit. Also, this can lead to difficulty in applying for any loan because lenders require the shoppers to have a good credit score.
What Credit Score is Needed to Use Amazon BNPL?
Amazon’s Buy Now Pay Later service does not require any minimum credit score. This is because many Amazon BNPL providers do not run a hard check on credit scores. Shoppers can easily choose BNPL as their payment method.
Following are the eligibility criteria retailers require for a shopper:
- The shopper must be a resident of the United States.
- You must have an active Amazon account.
- You must have a valid credit card. (Some retailers don’t require a credit card as well)
- Shoppers are required to provide a good payment history with the specific retailer.
Does Amazon BNPL Charge any Fees or Interest?
There is no interest rate or fees for using the Amazon BNPL service. Amazon provides its interest-free periods for payments with Buy Now Pay Later service. You can easily pay your payments and installments before the due date according to your purchase limits.
Amazon BNPL service charges a late fee if you fail to make on-time payments and installments. Installments will help you divide a large product price, but if you miss an installment or make a late payment, you will charge a late payment penalty.
Is Amazon Buy Now Pay Later Safe?
The major difference between Amazon BNPL and other BNPL services is that you apply for the service directly with Amazon. And the process involves no retailer and lender for making your purchases, repayments, or monthly installments. You can safely make purchases, pay payments, and set monthly installments with the Amazon BNPL program.
You have to keep track of some things that can hurt your credit score. Otherwise, the Amazon BNPL program is safe and sound to use. You need to avoid late payments and missed installments, and keep an eye on your purchase limit, so you don’t face overspending consequences. Also, you need to pay your credit card bills on time to avoid late fees and high-interest rates.
Is there a Minimum and Maximum Purchase Size While Using Amazon BNPL?
There is no minimum, and maximum purchase amount for Amazon’s Buy Now Pay Later service. The service is limited to a wide range of products; however, some items are not eligible for this program. You need to provide a credit card and other personal information to avail of the Amazon BNPL service.
You cannot use the Amazon BNPL service on the following items:
- Digital products and content
- Out-of-stock items (even if it says “available soon”)
- Amazon.com gift cards
- Vehicles
- Coins
- Collectibles
- Products bought from an outside retailer other than Amazon
- Amazon Prime subscriptions, Subscribe & Save, and Recurring Delivery orders
- Grocery items
- Prescription medication
Conclusion
Buy Now Pay Later service of Amazon is also called Amazon Monthly Payments. The service enables shoppers to buy Amazon products and pay for them later in full payment or installments. Amazon offers its BNPL service over many products. Still, some are not eligible, including vehicles, coins, Amazon.com gift cards, collectibles, and grocery items.
Amazon’s Buy Now Pay Later service is not preferable for building credit. Because lenders do not report to credit bureaus about your good performance of regular payments, a report of your late payments and missed installments can be sent to credit bureaus. This will create difficulty for taking future loans.
Amazon BNPL scheme is unique from other financing offers that provide users with credit card and Amazon store card availability. With BNPL of Amazon, you can pay hefty payments in equal installments and reduce the burden according to your budget. Amazon schemes are getting popular among younger shoppers. If you want to benefit from your Amazon membership, use the BNPL service and manage your monthly payments.
