Afterpay Vs. Affirm: My Experience And How To Use Them Responsibly
Recently, I shared on Instagram that I got my new Canon camera using Affirm. I asked if y'all would like to see a post comparing Afterpay and Affirm and how I use them. Y'all said yes. Today I am going to share a breakdown of Afterpay and Affirm. Do you use any of these services to pay for things? Which one is your favorite?
What Is Afterpay?
Afterpay is a program that helps you split purchases into smaller payments. Instead of paying your stuff off at once, you get around two months to pay for your purchase. You are charged 1/4th of the amount when you purchase.
Afterpay creates a schedule for you to pay them every two weeks. You get to look at this schedule before you confirm the first payment. Afterpay automatically charges your card on the day your payments are due. If a payment is late, Afterpay charges you up to $8. Late fees are capped at 25% of the purchase price of your items. You get ten days to pay (their grace period) before this fee is charged, though.
Each Afterpay order has to be at least $35. Since you only get two months to pay down orders on Afterpay, most of my orders have been small. There isn't any interest here, so it's much easier to pay on Afterpay than to put a small purchase on a credit card. At most, I've used Afterpay for an order that was $121. I don't like to use Afterpay for too much more than that.
Who Uses Afterpay?
Here are some awesome companies who use Afterpay:
- Chic Soul
- Fashion To Figure
- Fenty Beauty
- Free People
- MAC Cosmetics
I've used Afterpay on stores like Metal Marvels (use my code THA15 for 15% off), Klassy Network, bkr, Femfetti, and ThirdLove.
What Is Affirm?
Affirm is another way to split your payments up into chunks so that you can pay them off effectively.
With Affirm, you can get loans in 3, 6, and 12-month intervals. Affirm lets you know your payment schedule before you start your loan with them. Three-month loans tend to be interest-free, but 6 and 12-month loans tend to have an interest fee attach, depending on your credit history.
Affirm is excellent because you don't pay anything to start (unless you have to pay a downpayment.) You start paying for your items a month after the order is confirmed. There are no extra fees; what you see is what you get. If you can pay your loan back earlier than expected, you can even get interest removed. Overall, it's a fantastic site for bigger purchases. I believe the minimum for using Affirm is around $100. Some sites only use Affirm for the three-month payment option.
Affirm can impact and upgrade your credit (unlike Afterpay, who only ever really hurts your credit/is credit-neutral.) Using Affirm and Afterpay responsibly is critical because it can affect your credit.
Who Uses Affirm?
Here are some of the companies who use Affirm:
I've personally used Affirm to make purchases on sites like Everlane, Canon, Walmart, ELOQUII, and Replica Surfaces.
Afterpay Vs. Affirm: Which Is Better?
Now, let's get into which of these sites is better. Honestly, they are both fantastic. There isn't a ton of brand overlap. Most brands choose to use either Afterpay or Affirm, so it's a matter of picking the one that you can use at the time.
I feel like Afterpay is best for smaller purchases because there isn't any wiggle room when it comes to the payment schedule. You have to pay off everything in 2 months. No exceptions. With Affirm, you get 3, 6, and 12-month payment options for most items. You can spread out your payments with Affirm.
I feel like companies who have a lower cart balance tend to go with Afterpay over Affirm. Both sites have a plethora of stores on their roster, though, so I would see what they have to offer.
How Does Afterpay And Affirm Compare To A Credit Card?
Credit cards can be tricky. It's so easy to get into debt with credit cards. Paying the minimum balance each month is a surefire way to be in debt forever. Afterpay and Affirm set you up for success because you are paying down your items in a year or less. I love Affirm over a credit card because I know I won't be paying any more than what I signed up for if I make the appropriate payments each month. With Afterpay and Affirm minimum payments, you will finish purchasing your products at the end of the loan.
How To Use Afterpay And Affirm Effectively
Next, let's chat about how to use these services effectively. I don't want you going into debt with these services.
Keep Up With Your Due Dates
Keeping up with your due dates is vital, especially on Afterpay. Affirm due dates are pretty stable. With Affirm, you have a payment due every month on the same day. Since Afterpay sets payments every two weeks, the dates can get a bit wonky. For example, on the current Afterpay loan I have, my due dates are:
- January 8th (first payment)
- January 22nd
- February 5th
- February 19th
Yes, these days are all on a Wednesday, but the dates aren't as simple as my dates for Affirm, because they are all due on the same day each month. Affirm purchases are much easier to add to your monthly budget because they are due on the same day.
Only Borrow What You Can Afford
Affirm and Afterpay are great at splitting up your payments, but you should still be able to afford the purchases. Both Afterpay and Affirm have a lot of software to help identify what your limits should be. You shouldn't let Afterpay and Affirm pick your limits for you, though. Overall, you should have more control over where you put your money. Don't wait until Afterpay and Affirm tell you to stop.
Pay Things Early When You Can
You can pay both Afterpay and Affirm loans off early. If you are feeling generous, pay a few extra payments on your loans. This tip is incredibly helpful on Affirm, where you are likely getting charged interest for bigger purchases. Pay an extra month or two when you can, and watch your interest go down.
Both Afterpay and Affirm can be helpful ways to purchase items. You can use your money effectively and pay things off over time with these companies. Using both of these companies responsibly is essential because they can both impact your credit score if the loans aren't used correctly.