Amazon x Affirm Partnership: How to Use Buy It Now, Pay Later for Prime Day

It’s been almost a year since Amazon in partnership with Affirm. This announcement was made in late August 2021 – meaning Prime Day 2022 is the first Prime Day where members can “buy now, pay later”.(opens in a new tab)

We’ve already seen how shoppers flock to these apps during major trade events, including Increase in PayPal’s BNPL (Buy Now, Pay Later) service during Black Friday 2021. We expect the ability to pay in installments to also sweeten the prospect of Prime Day this year.

Before you go from zero to wild with your Prime Day haul, there are some factors to consider regarding Affirm versus other BNPL apps – as well as the pros and cons of using them in general.

The yassification of setting aside

The appeal of BNPL applications is similar to that of layaway programs, which peaked in the 90s until they are overrun by credit cards. The main difference: While layaway items are typically held until you make your final payment, tools like Affirm deliver your goods to you right after you order. Then you’ll choose from a selection of payment plans and pay for the item in installments.

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This essentially applies the monthly car payment model to any purchase from a participating retailer – and with Amazon as one of those retailers, you can split payment for just about anything.

Amazon is an incredibly user-friendly shopping platform, even without the option of a payment plan. The wide variety of Things being shipped with almost no wait time means filling your cart can look quite appealing. Add Affirm into the mix, and big totals become even easier to digest.

Compared to other big players – Klarna, AfterPay, Sezzle, etc. – Affirm has a catch: although it doesn’t charge late fees, it does charge interest. Rates range from 0-30% APR depending on your credit and the number of payments you select over a three- to 48-month term. (Different plans are available for different purchase amounts, and the minimum purchase amount to use Affirm is $50.) Affirm APR Calculator can help you estimate how much interest you’ll accrue on a certain purchase, which could be $100 or more if you get a loan for, say, an expensive piece of furniture.

To affirm “soft shot” to determine your credit will not affect your credit score, but the company does not promise not to report your payment history to the credit bureaus. To ensure you pay on time, we recommend enabling automatic payments if you can and confirming that your payment method will not expire during the payment period.

When it’s wise to buy now and pay later

For some purchases, layaway-type services make sense. Spreading the cost of big investments like a new 4K TV or a robot vacuum can be easier to manage than using a credit card, and can help you avoid a large sum of money leaving your account at the end of the day. time. If used responsibly, apps like Affirm can also help you bypass your paycheck schedule and monthly costs that require an upfront payment, like rent.

The wisdom of using BNPL services for basic necessities like groceries depends on your individual habits. While usually funding small daily expenses (like Starbucks) with an installment app can trigger a debt domino effect, it might not be the worst idea if you’re buying something like toilet paper in bulk.

When you shouldn’t buy now and pay later

Making a series of small payments can create the harmful illusion that you are paying less. While it is technically accurate (and admittedly happy) for the first few months, you’ll end up coughing up the full amount. Impulse purchases that seemed less risky at first may seem pointless once the Affirm Harvester comes around a few times.

So, a surefire way to avoid fueling the BNPL cycle is to figure out if you would buy that item if you didn’t have the option to split the payment.

Pay attention to the new tabs you open from the “Learn More”, “Related Products”, and “Customers Also Bought” sections. The devil on your shoulder saying “you really need it, though” can get louder when something is on sale. Hold yourself more accountable during big shopping events like Prime Day: You don’t want to wipe out your savings with a serotonin booster you didn’t know existed five minutes ago.

And definitely don’t snag something just to hit Affirm’s $50 minimum.

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