Afterpay vs Zip: What You Need to Know

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. Zip. Here are the major similarities and differences between the two. 

What Are Affirm and Zip?

Affirm and Zip 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 Zip in-person or through online shopping, you can get what you bought now and then repay the BNPL provider in equal payments, often interest-free.

Think of the first installment as a down payment. Then you can repay the remaining amount over the next several weeks or months rather than paying for the entire purchase at the outset.

From 30,000 feet up, Affirm and Zip have similar offerings; however, they differ when it comes to the nitty gritty.

How can Cushion help me?
Cushion Bill Pay gives you more visibility and control over your finances than ever before. Many people get hit with bank fees—such as overdrafts and late fees—due to cash flow problems. With Cushion, you can consolidate and track all of your bills and BNPL payments in one place, plan your budget by reviewing what’s coming down the pike, and avoid overdraft fees by temporarily pausing payments that might overdraft your account and resuming them when you are ready.

Major Differences Between Affirm and Zip

Founding

Affirm
Affirm was founded in San Francisco, California, in 2012.

Zip
Zip is an Australia-based BNPL provider founded in 2013. It acquired US-based payment installment platform Quadpay in 2020.

Countries of operation

Affirm
Affirm operates in the U.S. and U.S. territories.

Zip
Zip operates in Australia, Canada, Czech Republic, India, Mexico, New Zealand, the Philippines, Poland, Saudi Arabia, South Africa, UAE, and the United States.

Accepted by

Affirm
Affirm services more than 102,000 merchants, including Walmart, Target, Priceline, and Williams Sonoma. 

Zip
Nearly 26,000 merchants around the world—including Best Buy, Airbnb, and Sam’s Club—accept Zip.

Installment period

Affirm
Affirm offers two payment plans on BNPL loans. 

The first option is pay-in-four financing, which allows you to make four installment 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 installment payments can include an interest rate.

Zip
Zip also offers a pay-in-four financing model, which is a standard payment system across most Buy Now Pay Later providers. With this model, you divide four interest-free payments over six weeks, with the first payment due when you make the purchase.

Rescheduled payments

Affirm
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 on your BNPL loan if you set up automatic payments. This can come in handy if you’re looking to align your BNPL installment dates with your cash flow.   

Zip
Zip offers various repayment schedules. You can choose to pay your installments weekly, biweekly, or monthly depending on what works best for your cash flow. You can also allow Zip to automatically personalize your repayment schedule based on repayment behavior and spending habits. 

You can modify your repayment schedule from within the Zip app. However, modifications take 24 hours to go into effect. This means that if you need to reschedule an upcoming payment, you should do so more than 24 hours in advance in order to avoid a late penalty. The payment can be made up to 7 days late without penalty. When you move a payment date, future payment dates will also be adjusted.

Credit limits

Affirm
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


Zip
Zip Pay is a short-term credit option with a credit limit of up to $1,000. You may be able to increase your credit limit to $2,000 on eligible purchases after being a loyal customer for a certain period of time.

Fees

Affirm
Affirm does not charge late fees or fees to open an account and take out a loan. However, your credit score may be negatively affected by late fees. 

Zip
Zip is promoted as interest fee, but you will be charged a $1 convenience fee per installment. The company also charges a late fee between $7–$10, depending on your state of residence, if you miss a payment.

Credit check

Affirm and Zip do not do hard credit checks when you make a purchase using the service. Both providers run a soft credit check to get a sense of your credit history. 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. Neither Affirm nor Zip have a minimum credit score requirement when running a soft credit check. They rely on factors such as your previous use of credit and history with the BNPL provider.

When it comes to credit reporting, Affirm does report some loan payments to the credit bureaus, which can help or harm your credit score depending on your payment history and how much credit you used prior to using BNPL.

Zip, however, does not report your payments to the credit bureaus. This means that delinquent payments will not immediately impact your credit, but if your delinquent payments get sent to collections, this will negatively affect your credit report and credit score.

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 Zip

There are a couple of different ways to sign up for Zip: download the Zip app or choose Zip as your payment method during the checkout process. 

  • Download the Zip app or select Zip as your payment method when checking out with a partner merchant
  • When prompted, provide proof that you live in the U.S., are at least 18 years old, have a valid mobile phone number, have a valid U.S. debit or credit card, and have a valid U.S. mailing address
  • 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 typically don’t come with interest or involve many of the fees that come with a bank account or credit card.

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. Zip: 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.

What happens if I never repay Affirm or Zip?

If you fail to make your scheduled repayments through Affirm, Zip, PayPal Credit, or any other BNPL provider, you can run into credit and financial issues. 

Zip charges you late fees as long as your account is not current. Your account may also get disabled, meaning that you would not be able to make future purchases with the BNPL service.

Zip does not report to the credit bureaus, so if you fail to make a payment it will not immediately impact your credit score. However, if your account is delinquent for an extended period of time, Zip can report missing payments to collections, which can find its way back to the credit bureaus and harm your credit. 

Affirm, on the other hand, does not charge late fees, but the BNPL provider does report to the credit bureaus, so a late payment can damage your credit score and history.

Are Affirm and Zip legit?

Affirm and Zip are both legitimate and secure services. Both keep customer data safe and sound. BNPL loans act much the same as credit cards, personal loans, and payday loans except with shorter-term repayment plans.

Cushion helps you waste less money, save more, and live a financially healthier life. We monitor your bank and credit card accounts 24/7, find and alert you about pesky fees, let you know which fees are negotiable, which banks are cooperative, and can even automatically negotiate on your behalf.* To date, Cushion has secured customers more than $13 million in bank and credit card fee refunds—and we’re just getting started.

*Cushion only negotiates fees with high refund odds. We cannot guarantee any negotiations, a regular frequency of negotiations, or fee refunds—your bank makes the final call.

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