Is Afterpay Legit? Pros, Cons, and Buyer Responsibilities

The four-payment buy now, pay later model that has become so popular for online shopping was almost invented by Afterpay—but is Afterpay legit? The business began in Australia in 2014 and moved to the US in 2018. You can find the Afterpay option at checkout on a wide range of sites, from fashion to electronics.

The idea is simple. You can make four payments over six weeks with no interest on any purchase. No credit check that hurts your score. Pay in 4 will never charge you interest. It sounds like free money, but you have to pay $8 for each missed payment, and Afterpay started reporting to credit bureaus in 2025.

Most people get confused about what buyers are responsible for. You still have to pay even if the store messes up your order or takes a long time to issue a refund. When people think that Afterpay works like a credit card with dispute protections, that reality check surprises them. This review tells you what Afterpay is, how much it really costs, and when you should never use it.

What is Afterpay And How Does it Work

Afterpay launched in Australia in 2014 and in the US in 2018. Block, formerly known as Square, bought Afterpay for $29 billion in 2021. Afterpay works with more than 100,000 stores today, such as Sephora, Urban Outfitters, and Foot Locker. The service is very popular in the fashion and beauty industry.

Afterpay’s main product is Pay in 4. You can make four equal payments over six weeks for any purchase between $50 and $1,500. You have to pay the first payment at checkout. Every two weeks, the other three payments are automatically deducted. Pay in 4 doesn’t charge interest, which makes it better than credit cards.

You can now pay for things over 6 to 12 months with the new Pay Monthly option. Depending on the terms, this product may charge interest. Pay in 4 is the most popular option because it’s easy to use and doesn’t charge interest. When you first sign up for Pay in 4, Afterpay does a soft credit check that doesn’t hurt your credit score.

If your payment doesn’t go through, you’ll have to pay late fees. Afterpay charges up to $8 per missed payment, but the total fees can’t exceed 25% of the order value. You could owe up to $25 in late fees for a $100 purchase over the course of the payment schedule. If you miss a payment, Afterpay puts your account on hold until you catch up, which stops you from making new purchases.

Is Afterpay Legit

Yes, Afterpay is a real thing! The business has been in operation since 2014 and serves millions of customers worldwide. Block’s 2021 purchase gave the company greater credibility and more capital. Afterpay works with major retailers and handles billions of dollars in transactions each year.

Just because Afterpay is legal doesn’t mean it’s the best option for consumers. There are hundreds of complaints about Afterpay on the Better Business Bureau website. Refund delays, account freezing after a single missed payment, and not knowing who is responsible when orders go wrong are common problems. Some customers say that Afterpay kept charging them for orders they returned, and it took weeks for them to get their money back.

Afterpay is a real company that delivers what it says it will. The problems are that it’s easy to use too much and that you don’t have as much protection as you do with credit cards when merchants don’t deliver.

Afterpay Costs and Fees

If you pay on time, AfterPay is completely free. A $200 purchase is split into 4 payments of $50 each, with no interest or fees. That’s what Afterpay’s ads focus on to get people to buy. The interest-free part is real, and that’s why so many people use the service.

When payments don’t go through, late fees show up. If you miss a payment, Afterpay can charge you up to $8. The fees can’t exceed 25% of the order value, so a late fee of $25 can’t exceed that limit. That limit keeps you from having to pay a lot of money, but $8 for each missed payment adds up quickly when you have a lot of Afterpay purchases.

Here’s how it works in real life. With Afterpay, you can buy a pair of sneakers for $200. You have to pay $50 at the register and then three more $50 payments over the next six weeks. Pay on time, and you’ll have paid exactly $200 for $200 worth of stuff. You missed the second payment because you forgot to update your card when it expired. That costs $8 for being late. If you miss the third payment, you’ll have paid $216 for sneakers that cost $200.

How Afterpay Impacts Your Credit

It was safe for your credit score to use Afterpay earlier, when the company conducted soft credit checks that didn’t hurt your score and didn’t report your payments to the credit bureaus. But in 2025, Afterpay began reporting to Experian and TransUnion, which changed things.

When you first sign up for Pay in 4, they still do a soft credit check. Soft checks don’t lower your score, but they do confirm your identity and income. That makes it look like Afterpay is safe for credit. The catch is that credit bureaus now get reports of missed payments. A 30-day late payment will hurt your credit score and remain on your report for 7 years.

Afterpay is now much riskier than it used to be because of changes in credit reporting. If you missed an Afterpay payment before 2025, you only had to pay late fees and have your account limited. It hurts your credit score just as not paying your credit card bill does. If you miss one payment, you could end up paying hundreds or thousands of dollars more in interest on your mortgages, car loans, and credit cards over the years.

Defaults are even worse. If you don’t pay Afterpay at all, they will send your account to collections. Collection accounts hurt your credit score and stay on your report for seven years. Afterpay will no longer work for you either. Not taking Afterpay seriously has serious consequences.

Buyer Responsibilities With Afterpay

Almost everyone who uses Afterpay has trouble with this part. Even if the store messes up your order, sends you the wrong item, or takes a long time to process returns, you are still responsible for making payments. Afterpay is not a middleman that keeps you safe. The main thing the business does is handle payments.

If you return something you bought with Afterpay, the store must notify Afterpay. Afterpay stops charging you and refunds any money you’ve already paid. The problem is that it can take merchants weeks to tell Afterpay. You have to keep paying for something you already sent back until the merchant and Afterpay reach an agreement.

Some users say they made all four payments on items they sent back after the first one. You have to call both the merchant and Afterpay several times to get your money back. Getting a refund takes a long time and is very annoying. You can’t argue with Afterpay charges like you can with credit card charges. You should talk to the merchant about it, according to Afterpay.

You have to keep track of when payments are due. Afterpay sends reminders, but if you miss them and a payment fails, it’s your fault. If your card expires or you get a new card number, you need to change your payment method right away. If you miss a payment, your Afterpay account will be frozen until you catch up.

For some users, account freezes are permanent. If you miss a payment, Afterpay may let you catch up and keep using the service. If you miss more than one payment or don’t pay at all, you will never be able to use Afterpay again. The company doesn’t make it clear whether accounts are frozen permanently or only temporarily.

Pros & Cons of Using Afterpay

Benefits of Afterpay

• No interest or fees when paid on time – Pay in 4 splits purchases into installments without interest charges if you meet payment deadlines.
• Quick checkout integration – Seamless one-click process that works smoothly with merchant websites.
• Gradual spending limit increases – Limits grow as you demonstrate responsible payment behavior, preventing overspending.
• Soft credit check only – No hard inquiry that could lower your credit score during application.
• Credit-building opportunity: On-time payments are now reported to credit bureaus (since 2025), helping build credit history.
• Centralized payment tracking – A single app dashboard shows all purchases and upcoming payments, eliminating scattered merchant emails.

Drawbacks and Risks

• Steep late fees – $8 penalty per missed payment adds up fast (three purchases = $24 in fees for one missed payment).
• Credit score impact – 2025 reporting changes mean late payments now hurt your credit like traditional credit cards.
• Spending psychology trap – Breaking payments into smaller chunks ($75 biweekly vs $300 upfront) makes expensive items feel affordable, leading to impulse purchases.
• Complicated refund process – Merchants control when charges stop, not Afterpay, making refunds harder than credit card chargebacks.
• No dispute protection – You remain responsible for payments even if merchants fail to deliver or send the wrong items.
• Account freezing – Missing one payment locks your entire Afterpay account until it is resolved.
• Removes natural spending friction – Easy checkout eliminates the psychological “pain of paying” that normally prevents overspending with cash or debit.

Who Should Use Afterpay

Afterpay is good for people who are disciplined and plan their purchases. Afterpay is fine if you want to spread your payments over 6 weeks and you already planned to buy something. You need to be absolutely sure you can make all four payments on time and that you understand your responsibilities as a buyer.

Don’t use Afterpay to buy things on a whim. It feels like everything is affordable because it’s so easy to click through checkout. You probably shouldn’t buy something if you weren’t going to buy it before you saw the Afterpay option. Wait a day. If you still want it, pay in cash or with a debit card instead of making payments.

If you’re already having trouble with money, don’t use Afterpay. People who live paycheck to paycheck are at risk due to late fees and credit reporting. An unexpected bill that keeps you from paying Afterpay can lead to late fees and a lower credit score. You can’t use Afterpay to help you with money problems. It’s a tool that makes things easier for people who already have money.

Also Read: 15 Best Cash Advance Apps in 2026

Afterpay vs Other BNPL and Alternatives

Klarna charges late fees up to $7 per missed payment, slightly less than Afterpay’s $8. Klarna also reports to credit bureaus now. Affirm doesn’t charge late fees but uses hard credit checks and charges APRs up to 36% on interest-bearing loans. The differences between BNPL providers are minor. They all encourage overspending and create payment juggling problems.

Credit cards with 0% intro APR offer better terms if you have decent credit. You get 12 to 18 months of interest-free financing instead of 6 weeks. Credit cards provide purchase protection, fraud liability limits, and dispute resolution processes that BNPL services don’t offer. The downside is that you need good credit to get approved for cards with 0% intro offers.

Paying with a debit card or cash is always better than financing. If you can afford something today, pay for it today and avoid payment plans. Saving up for purchases takes longer but keeps you out of debt and helps you appreciate what you buy more than clicking through a BNPL checkout.

What Beem Is and Where It Fits

Beem is a money app for people in the United States who need cash help without juggling buy now, pay later payment schedules across multiple merchants. You can learn more at https://trybeem.com. Beem works for people who want to make purchases without tracking four payment dates per purchase and risking late fees or credit damage.

Afterpay splits purchases into four payments over six weeks, with an $8 late fee per missed payment. Miss a payment by 30 days, and your credit score takes a hit. Stack three Afterpay purchases, and you’re tracking 12 separate payment due dates. Beem offers Everdraft™ cash advances up to $1,000 with no interest charges. You repay from your next paycheck instead of managing multiple payment schedules.

Beem also includes a Subscription Monitor that finds recurring charges draining your account every month. Those forgotten subscriptions cost $50 to $150 per month for many people. Canceling them frees up cash so you can afford purchases without needing Afterpay. Beem helps you fix the underlying cash flow problems instead of layering on payment plans.

Why Choose Beem Over Afterpay

The difference between Afterpay and Beem is complexity and risk. Afterpay splits each purchase into four payments, which you track across different merchants. Buy three things in a week and you’re managing 12 payment due dates over the next six weeks. Miss one payment and you pay an $8 late fee. Miss it by 30 days, and your credit score drops.

Beem provides cash advances with no interest and one simple repayment from your next paycheck. A $400 Beem advance costs zero in interest or fees if you repay on time. A $400 Afterpay purchase costs nothing if you make all 4 payments on time, but a single missed payment costs $8 and risks credit damage.

Afterpay appears at checkout tempting you to buy things you weren’t planning to purchase. The psychological trap of making prices feel smaller through payment plans encourages overspending. Beem helps you access cash for actual needs without encouraging impulse purchases. You use Beem for specific expenses, not when you’re browsing online stores.

Also Read: Paycheck Management for Gig Workers With Multiple Income Streams

When Afterpay Might Make Sense

Afterpay makes sense for planned purchases when you’re confident you can make all four payments on time. If you’re buying something you already budgeted for and you want to spread the cost over six weeks to manage cash flow, Afterpay works. You must understand that you’re responsible for payments even if the merchant messes up your order.

Never use Afterpay for impulse purchases or things you can’t afford to pay in full today. The payment plan doesn’t change your actual affordability. It just spreads the financial reality over six weeks and adds risk through late fees and credit impacts. For most people, Afterpay creates more problems than it solves.

Final Verdict

Afterpay is a legitimate company that’s been operating since 2014 and is now owned by Block. The company partners with over 100,000 merchants and provides the service it promises. Pay in 4 is genuinely interest-free if you pay on time.

Afterpay became much riskier in 2025 when it started reporting to credit bureaus. Missed payments now damage your credit score the same way credit card late payments do. Late fees of $8 per missed payment pile up fast when juggling multiple purchases. Buyer responsibilities are confusing, and you have less protection than with credit cards when merchants don’t deliver.

Better alternatives exist for most situations. Credit cards with 0% intro APR offer longer interest-free periods if you have decent credit. Paying cash or using a debit card avoids debt entirely. Cash advance apps like Beem provide short-term help without the payment tracking complexity and late fee risks. Use Afterpay only for planned purchases where you’re certain you can make every payment on time.

FAQs About Is Afterpay Legit