Have you ever asked yourself or your friend if AfterPay accepts prepaid cards and how payments work? Well, you are at the perfect place to find the answer to such a question.
More and more online retailers are opening up various methods for making purchases and paying later, whether that’s payment in whole, monthly payments, or weekly payments. AfterPay joined the “Buy Now Pay Later” business and became fairly popular in a short time.
Unfortunately, they didn’t become popular because they accept all forms of payment. They don’t. Prepaid cards are not accepted by AfterPay currently. Maybe that will change at some point down the line but there is no indication that it will.
AfterPay accepts credit and debit cards, including Mastercard, VISA, and American Express. Capital One credit cards, like prepaid cards, are not an accepted form of payment at the moment.
AfterPay Payment Options
If you want to use AfterPay, you have to download the app to get started and create a username and password. Before your account is complete, you have to enter your debit or credit card information.
Since AfterPay accepts Apple Pay and Google Pay, you can use those accounts and combine them with your AfterPay account.
Read also >> Does Apple Pay Accept Prepaid Cards? (What To Know Now!)
To do this, you create a virtual AfterPay card and then link it to your Apple or Google accounts. If not, the following are payment options, including financial institutions you can use on AfterPay:
- Debit Card
- Credit Card
- Contactless Payments (Apple and Google)
- Amex
- VISA
- American Express
- Mastercard
- Bank Account (ACH) Checking accounts only and must have a debit card on file as well
AfterPay did not make the decision on Capital One Credit Cards. Capital One released a statement not all that long ago that Capital One would not allow payments made on Capital One Credit Cards through AfterPay. Whether that was a good decision or not, it is what it is.
If you decide that you would rather have payments through AfterPay deducted directly from your bank account, you can do that as well.
However, AfterPay will not accept savings accounts—checking accounts are the only accounts you can link to your AfterPay account.
You also have to have a debit card on file if you want to link your bank account. Not a credit card—a debit card only.
If you do not have a debit card linked to your AfterPay account, you won’t be able to add and link your bank account.
Since AfterPay accepts debit cards and Mastercard, you can add your PayPal debit card to your account without any problems.
PayPal’s debit cards are Mastercards and they are backed by Wells Fargo. So, for those who work from home or freelance and take payments through PayPal, you can take advantage of AfterPay as well.
Read also >> Does PayPal Accept Prepaid Cards? (Do This Before…)
How Does AfterPay Work with Payments?
There are basically two types of ways you can make payments through your AfterPay account. The first is through monthly payments and the second is a “pay-in-4-quarters” option.
Monthly Payments
AfterPay doesn’t have a problem with you choosing to pay monthly or the pay-in4 option. You can even opt out of the automatic monthly payment and make your payments on your own.
However, keep in mind that AfterPay charges you $8 for every missed payment or declined payment on the due date.
With monthly payments, you can opt for automatic deductions from your account on a specific date or you can make the payments yourself, also on a specific date.
Pay-In-Four-Orders
This method is the most common and the most popular on AfterPay. Like the monthly payments, you have the option of setting the payments to automatic or making those payments on your own, so long as you do so on the due date.
The pay-in-4 method is a payment every two weeks for a total of four payments to cover the entire cost. The first payment goes out when you initially make the purchase.
The second two weeks later, the third payment goes out 4 weeks from the initial payment date and the last payment is due at the end of 6 weeks.
AfterPay will only hit you with an $8 late period after you exceed the grace period from your payment due date.
They will continue to hit you with late fees of $8 each until you reach 25% of the price of your item. If your item cost $400, the late fees will stop once they total $100.
While it’s nice to know that they won’t exceed 25%, your late fees will build up twice as fast with the pay-in-4 method as they will with the monthly payments option.
Does AfterPay Check Credit When You Apply?
AfterPay guarantees all of its customers that it will not conduct credit checks on their accounts and that includes soft credit checks. AfterPay is founded on the idea of helping people improve their financial situations.
Knowing that credit checks can be harmful to people, especially those right on the borderline of bad credit, AfterPay doesn’t do them.
You’re free to add a debit or credit card to your new AfterPay account without worrying about a credit check now or further down the road.
In addition to that, AfterPay doesn’t report customers to credit reporting agencies for failure to pay. That includes when paying late and well past the due date.
On the flip side, that means your credit score will not improve while using AfterPay.
Just like they don’t report you to the credit bureaus for failure to pay, they also don’t report your timely payments and expenditures so it’s a win-loss when it comes to building your credit.
Last but not least, AfterPay doesn’t charge any interest fees on your purchases. The only fee they charge is the $8 for late payments that are outside of the grace period.
The only upside to paying off your account early is that you no longer owe anything.
All Things Considered
AfterPay is another interesting option in the ever-expanding BNPL market. Like Affirm, or Amazon monthly payments, it allows you to break up large and costly items into something more reasonable, to be covered in monthly or bi-weekly installments.
While AfterPay accepts most credit and debit cards, including Apple and Google Pay, they do not accept prepaid cards or Capital One credit cards.
References
https://help.afterpay.com/hc/en-us/articles/360016052892-How-do-payments-work
https://www.wkfcu.org/Services/GoodToKnow/2021-What-You-Need-To-Know-About-Afterpay/