If you are looking for ways to improve your shopping experience through cashless purchases and paying later with zero monthly fees and zero interest, you should consider Afterpay.
Afterpay is one of Canada’s best buy-now-pay-later (BNPL) services with competitive offers in the market. They offer plain and simple instalment plans, with no credit check required.
If you want to sign up for Afterpay but don’t know if it’s worth it, this article is for you. This Afterpay Canada Review discusses everything about Afterpay, how it works, its pros and cons, and everything from late fees to credit checks.
Without much ado, let’s get into it.
What is Afterpay?
Afterpay is an Australian-based fintech company offering buy-now-pay-later (BNPL) services across Australia, the UK, the US, New Zealand and recently opened to consumers in Canada.
Founded in 2014, Afterpay is based in Sydney and has over 1300 employees, over 75,000 partners and over 13 million global customers. The company has been available to Canadians since 2020 and aims to promote responsible spending by approving customized spending limits according to individuals’ spending habits.
Furthermore, Afterpay offers no-fee and zero-interest loans with four instalment payments on cashless purchases online or in-store. It lets you make your first instalment payment at the retailer’s point-of-sale, and make the remaining three payments bi-weekly, each for 25% of the total purchase price.
How Does Afterpay Canada Work?
Afterpay works like other buy-now-pay-later (BNPL) apps in the market, helping you break up expensive purchases into affordable chunks. They strive for the financial freedom of all their customers, without regards to their current financial position and credit history.
They offer their services for free and you don’t have to worry about additional interest rates or transaction fees.
You only need to create an account and start shopping at your favourite stores using Afterpay as your checkout payment method. The merchant will ship your goods once you check out.
However, you will be required to make the first (25%) out of the four instalment payments at the retailer’s point of sale. The remaining three payments are due after every two weeks.
The loan is retrieved automatically through your debit or credit card on the due date. But you can pay your debt before the due date without penalty, reducing your chances of late payment fees.
The Afterpay new and notification system will notify you constantly to ensure you don’t miss your due date. However, if you don’t make your payments, your account will be paused to prevent further expenses.
Which Stores Accept Afterpay?
Afterpay partners with several stores that accept payment after delivery with no interest rate or fees. Afterpay partners with several stores across different categories, such as clothing, shoes, jewelry & accessories, beauty, fitness & wellness, etc.
However, you must visit the Afterpay page to access Canadian stores. The following are some of the top brands Afterpay partners with in Canada:
- Canada Mats
- Bed Bath & Beyond
- Isiro Canada
- Skre Canada
- Anian MFG
- Fit Affinity
- Underground Clothing
- The Drive Skateshop, etc.
Is Afterpay Legit and Safe?
Afterpay is a legit and safe pay-after-delivery app trusted by over 13 million global customers and over 75,000 partners.
As a PCI DSS Level 1 licensed Service Provider, Afterpay stores and protects your personal information according to the Payment Card Industry Security Standards.
Furthermore, Afterpay has a 4.9 out of 5-star-rating on Trustpilot, a 4.9 out of 5-star-rating on the App Store and a 4.8 out of 5-star rating on Google Playstore.
Benefits and Downsides of Afterpay Canada
It’s essential to weigh the good and ugly sides of any BNPL app before subscribing to it. Here are the pros and cons of Afterpay that you need to know.
- No Interest: Afterpay doesn’t charge interest on its pay-after-delivery loan. This makes it different from a typical credit card.
- No Fees: Afterpay doesn’t charge upfront fees on its loans when you pay on time.
- Flexible Installment Payment: The Afterpay’s part payment feature allows you to pay more or less than the full instalment amount without penalty. This gives you the flexibility of customizing your debt payment.
- No Credit Checks: Afterpya doesn’t conduct credit checks nor consider your credit score when assessing your application.
- Late Payment Fees: Afterpay charges fixed late payment fees for defaulting on your payment on the due date.
- Instant First Installment: Unlike other BNPL apps, you must make the first payment (25%) out of the four instalment payments to get your order approved.
- Spending Limit: While Afterpay aims to promote responsible spending, the starting spending limit may be insufficient for you.
- Doesn’t Improve Credit Score: Like other pay-after-delivery apps, Afterpay doesn’t report to credit bureaus. Hence your loan payment will not improve your credit score.
Is Afterpay Good For Your Wallet?
Since Afterpay does not require credit history checks or report payment information to credit bureaus, you should only use Afterpay if you need financing for a short period, have a bad credit score, need a financial option that requires no interest, and are prepared to pay instalments on time.
Afterpay is a good alternative to traditional credit cards in Canada and their high-interest rates, but it needs to be disciplined to avoid encouraging bad habits.
Does Afterpay Affect Your Credit Scores?
When you sign up on Afterpay, the company only runs a soft credit check, so opening an Afterpay account doesn’t affect your credit score. The company decides within seconds if you are approved and informs you immediately if you can use Afterpay as a form of payment.
New users can only spend up to a maximum of $400 to $500, and only old users with good repayment history can spend up to $2000.
However, Afterpay does not send your payment information to credit bureaus, unless you miss a payment. You don’t get any benefit when you pay off your loan promptly.
There are other buy-now-pay-later apps available to Canadians that you can consider. Some might offer you better services and features compared to Afterpay. Here are a few alternatives to Afterpay.
Klarna is a popular fintech company offering pay-after-delivery services in Canada and 16 other countries. Like Afterpay, Klarna doesn’t charge interest and fees on its pay-after-delivery services. However, late payment fees apply.
Klarna sets itself apart in the buy-now-pay-later (BNPL) with exclusive deals and complete pay-after-delivery services, attracting more than 90 million shoppers.
Unlike Afterpay, Klarna doesn’t require making the first instalment payments before getting approval. Instead, it allows you to make four instalments, due every two weeks.
Like Afterpay, you can also pay off your Klarna loan before the due date without penalty. The payment structure is the major difference between Klarna and Afterpay.
However, I recommend you read this Klarna Canada review before deciding.
Affirm is a global buy-now-pay-later (BNPL) point-of-sale loan available to both online and offline shoppers in Canada.
Like Afterpay, Affirm also partners with many stores in Canada that are luxury goods retailers, like clothing and home decor, and helps you spread purchase payments over time.
Affirm lets you make instalments for up to 36 months, but with interest rates ranging from 10% to 30% APR, depending on your credit score.
If you can confidently make payment in four instalments, you should consider Afterpay. Otherwise, you can consider Affirm app.
Final Thoughts on Afterpay Canada Review
Now you have gone through these Afterpay reviews and know what Afterpay entails and the cost of using it as your pay-after-delivery service. So the question is: “Is it worth it?” This is a rhetorical question. But if you ask me, I will say “YES and NO.”
Afterpay is worth it for any responsible spender looking for an interest-free loan on everyday or unexpected expenses.
However, if you are looking for rewards on purchases and are ready to pay the costs, I recommend using one of the best cashback credit cards out there.
Overall, you can’t make the wrong choice with Afterpay Canada. But remember, it will not improve your credit score like a typical credit card.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
The primary purpose of Money Reverie is to help everyday Canadians make better financial decisions by providing up-to-date financial news and information, reports, product reviews, and government programs.