Buy Now Pay Later, BNPL for short, has become one of the newest, most efficient, and most popular ways to get things now but spread your payments out over the weeks or months to come. Usually the BNPL provider that you use depends heavily on which merchant you’re shopping through. Although some merchants, such as Target and Amazon, accept several different providers. So you’re trying to figure out: Affirm vs. Sezzle. Here are the major similarities and differences between the two.
What Are Affirm and Sezzle?
Affirm and Sezzle are BNPL providers that make it easier for you to buy things from brick-and-mortar or online stores using short-term credit. When you pay with Affirm or Sezzle in-person or through online shopping, you can get what you bought now and then repay the BNPL providers with interest-free installment plans over the next several weeks or months.
From 30,000 feet up, Affirm and Sezzle have similar offerings; however, they differ when it comes to the nitty gritty.
Major Differences Between Affirm and Sezzle
Affirm was founded in San Francisco, California, in 2012.
Sezzle was founded in 2016 and is headquartered in Minneapolis, Minnesota.
Countries of operation
Affirm operates in the U.S. and U.S. territories.
According to the Sezzle help center, you can use the service in the U.S., Canada, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, and the U.K. However, the Sezzle Virtual Card can only be used in the U.S. and U.S. Territories.
Affirm services more than 102,000 merchants, including Walmart, Target, Priceline, and Williams Sonoma.
Sezzle has more than 78,000 merchant partners, including Apple, Disney, Nike, and Target.
Affirm offers two payment plans.
The first option is a pay-in-four model, which allows you to make four payments every two weeks, interest-free, with the first payment due at checkout. The second option is a monthly payment model that allows you to space your payments out over 3-60 months. Monthly installments can include an interest rate.
When you use Affirm, the alternative payment platform issues you a single-use virtual card that you use to make the purchase. Think of it like an Affirm credit card. When you make a purchase, you’ll have to pay the order off in installments in order to avoid fees or credit damage.
Sezzle also offers a pay-in-four model, which is a standard payment system across most BNPL providers. With this model, you divide four interest-free payments over six weeks, with the first payment due when you make the purchase. Think of this first installment as your down payment for the order.
According to Affirm’s help center, the provider does not allow you to reschedule payments or give you more time to pay on a monthly basis. However, you can select which day of the month that you’d like to make payments if you set up automatic payments, which can come in handy if you’re looking to align your BNPL installment dates with your cash flow.
Sezzle allows you to reschedule one payment per order. Some people may be able to access additional reschedules for a fee; however, this option is not available to everyone.
Affirm does not impose credit limits. If you make a purchase using the BNPL provider, Affirm will prequalify you for a certain loan amount. Prequalifying will not affect your credit score, nor do you have to use the full amount that Affirm prequalifies you for.
Prequalification depends on a number of factors, including:
- Payment history with Affirm
- Overall credit history
- Length of time that you’ve had an account with Affirm
- Interest rate of the merchant you’re applying for
- Current economic conditions outside of your own credit history
Sezzle does have spending limits, but there are rules and restrictions.
- The Sezzle system automatically determines your spending limit on a case-by-case basis.
- The spending limit approval process depends on how long you’ve been a Sezzle customer, your credit history pulled from a soft credit check, and your order and payment history with Sezzle.
- The Sezzle support team cannot tell you your spending limit or manually increase spending limits.
- You can view your spending limit in one of two ways: joining Sezzle Up or using a bank account as your default payment method.
- Your spending limit can vary by brand.
- If you are unable to make a purchase because of a low spending limit, you may need to lower the amount you spend on a purchase or make payments on outstanding items.
Hidden fees, late fees, and other penalties
Affirm does not charge annual fees, hidden fees, or fees to open an account, take out a loan, or on late payments. However, your credit score may be negatively affected by a late payment.
Like Affirm, Sezzle doesn’t charge an annual fee. However, Sezzle charges fees for late payments, failed payments, rescheduling more than one payment per order, reactivating an account after it has been deactivated, and paying by card rather than directly through a bank account.
Affirm and Sezzle do not do a hard credit check when you make a purchase using the service. Both providers run a soft credit check to get a sense of your credit history. Although, neither provider has a minimum credit score requirement for loan approval, your score does impact your chances of getting approved. A soft credit check provides enough information to give the BNPL services a sense of your creditworthiness without penalizing your credit score with a hard inquiry.
However, Sezzle offers a feature called Sezzle Up. With Sezzle Up, you authorize the provider to report your payment history to the credit bureaus. If you make on-time, full payments to the provider, this can boost your credit history and credit score. But if you make late payments or miss them entirely, this can damage your credit.
How to Sign Up for Affirm
You can sign up for Affirm using the Affirm app, at affirm.com, or at an Affirm-partner store.
- Go to the Affirm website, download the app, or choose to pay with Affirm at checkout
- When prompted, enter your full legal name, mobile number, email address, date of birth, and the last four digits of your social security number
- Complete sign-up
How to Sign Up for Sezzle
There are a couple of different ways to sign up for Sezzle: on the website, in the app, or during checkout using a merchant partner.
- Go to the Sezzle website, download the app, or choose to pay with Sezzle at checkout
- Enter your name and date of birth, and credit a PIN
- Complete sign-up
How to Use Buy Now Pay Later Responsibly
Buy Now Pay Later (BNPL) services allow consumers to make purchases online or in-store by breaking up larger ticket items into a small number of fixed installment payments. BNPL is attractive to consumers because purchases are typically interest-free and don’t involve many of the fees that come with bank accounts and credit cards.
The popularity of BNPL has grown exponentially in recent years — and for good reason. These payment options provide more opportunities for people of underserved and underbanked populations. However, there are also a number of potential risks involved.
Advantages of Buy Now Pay Later
- You get easier access to goods and services
- Customers pay low-to-no fees and interest charges on their payment plan
- You can maintain and build your credit score
Disadvantages of Buy Now Pay Later
- It is easy to overspend
- There are potential fees or interest charges and credit score damage
- Buy Now Pay Later can be difficult to manage
Frequently Asked Questions
Affirm vs. Sezzle: Which is better?
It is not a matter of which Buy Now Pay Later service is better. Rather, it is important to consider whether BNPL is the right choice for you at all.
The service that you use as a customer depends on which merchant or company you are purchasing from and in what country you are located. All brick-and-mortar and online retailers don’t partner with all BNPL companies.
Before deciding to make a purchase with BNPL, it’s important to consider: how much you really want or need the product or service, your budget, and cash flow.
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What happens if I never repay Affirm or Sezzle?
If you fail to make your scheduled repayments through Affirm, Sezzle, or any other BNPL providers, you can run into credit and financial issues.
Sezzle charges you late fees if you miss a payment or your payment fails. Your account may also get disabled, meaning that you would not be able to make future purchases with the BNPL service. If you use Sezzle Up, the provider will also report your late or missed payments to the credit bureaus, which can negatively impact your credit score.
Affirm, on the other hand, does not charge late fees. Like Sezzle, though, Affirm reports payments to the credit bureaus, so a late or missed payment with Affirm can also damage your credit report and score.
Are Affirm and Sezzle legit?
Affirm and Sezzle are both legitimate and secure services. Both keep customer data safe and sound and act much the same as credit cards, personal loans, and payday loans except with shorter-term repayment plans.
What is an alternative to Buy Now Pay Later?
Given that Buy Now Pay Later is a form of short-term credit, you have other financing options.
One option is to open a 0% interest credit card. This can be ideal for smaller, less expensive purchases. Typically, 0% interest credit cards come with an introductory period, meaning that after a certain amount of time, the interest rates will increase from 0%, often to above-average interest rates.
If you plan to open a 0% interest credit card for a specific purchase, it’s important that you have a payment schedule in place to pay off your purchase before the credit card provider begins to charge interest. If you don’t, you risk accruing credit card debt.