Apple Pay Later – What is it and How Will it Work?

Jeannie S. Howard
Written By Jeannie S. Howard

Jeannie has more than 10 years of experience in the online shopping and personal finance industry.

The latest iOS update, iOS 16, was released on September 12. In it, there was supposed to be an Apple Pay Later option; however, the fine print on the update states that Apple Pay Later will be available on a future date, but no date was provided.

While we anxiously await its arrival, here’s what it is and how it will work.

What is Apple Pay Later?

Like its competitors, Apple Pay Later will allow you to break up the purchase cost into equal installments, totaling four payments made in six weeks.

Like Affirm or Klarna, your first payment is due when you buy the item, but you pay only 25% of the cost.

From there, you make payments bi-weekly for the next six weeks, paying 25% of the cost with each payment.

How Does it Work?

When Apple releases Apple Pay Later, and you make a purchase through your Apple wallet, you’ll have two choices:

  • Pay in full with your payment method of choice
  • Pay in four installments with Apple Pay Later

If you choose Apple Pay Later, it will show you the payment schedule before accepting.

To use Apple Pay Later, you must link a debit card; you cannot use a credit card. Then, you’ll set up your automatic payment schedule, but you can make payments early if you want to pay them off sooner.

Not everyone will be eligible to use Apple Pay Later, though. Right now, they say eligibility is based on eligibility checks (credit checks) and approval. However, once you have a history of using Apple Pay Later, they’ll use that as a part of their eligibility decisions.

A big part of their approval process also has to do with fraudulent activity. They will check your banking and Apple Pay history. If everything checks out and you haven’t been involved in fraudulent activities, you have a good chance of approval.

The good news is you can check your eligibility in the app before making a purchase. This allows you to decide how to proceed if you aren’t approved or don’t like the installment payments.

The Wallet app will also include other features to help you manage your payments and balances. For example, Apple automatically enables auto-pay to pay back your balance; however, you can turn it off if you don’t want it.

The key is that you pay your balance back on time, though. If you miss payments, it could hurt your chances of future use of the feature.

Related: List of online stores that accept Apple Pay

Does Apple Pay Later Hurt your Credit?

If you choose Apple Pay Later, your credit will be checked, but it’s a soft credit check. This means no one except you will know they checked your credit. It also doesn’t hurt your credit score.

However, the soft credit check results will determine if you qualify for the buy now pay later plan.

How Much can you Spend?

Like most buy now pay later plans, the amount you can spend varies. Apple hasn’t released its official limits yet, but speculation has the amounts between $25 – $1,000.

Where can you Use Apple Pay Later?

For now, Apple states that you can use Apple Pay later, where Apple is accepted online or in an app. However, they haven’t specified if it will be used in physical stores like Affirm.

Are there Fees?

Right now, there aren’t any fees to use Apple Pay Later. So even if you miss a payment, they don’t intend to charge late fees.

However, if you miss payments, it could hinder your chances of using the program in the future.

An Example of Apple Pay Later

Let’s say you find a purse you want to purchase but don’t have the money to pay it in full. The cost is $500. You pay with Apple Wallet and are given the option to pay in full or break your payment into the following:

  • $125 due at purchase
  • $125 due in 2 weeks
  • $125 due in 4 weeks
  • $125 due in 6 weeks

At the end of the term, you’ve paid $500, the exact amount of the purchase. You don’t pay any interest or fees.

Should you Use Apple Pay Later?

The bigger question is, should you use Apple Pay Later when it’s available?

Like any buy now, pay later program, you should consider it carefully. Since you agree to future payments or spending money you don’t have now, is it a wise purchase?

Buy now, pay later programs can encourage impulse spending, which isn’t a good habit. However, suppose you’ve carefully thought about it, checked your budget, and know you can afford the payments without causing financial issues. In that case, making purchases more affordable can be a good way.

The nicest feature is that there aren’t any fees, not even late fees. While making your payments late is not a good idea, knowing that you won’t pay anything extra is a nice feeling.

Final Thoughts

Apple Pay Later is a highly anticipated feature that, while it should have been out with this latest update, is still yet to come.

The way it sounds right now, it can be a good alternative to other BNPL plans like Affirm and Klarna. The key is keeping your credit in good standing and avoiding any negative banking marks or having your name involved in any other fraudulent activity.

If you’re eligible for Apple Pay Later when it becomes available, consider your purchases carefully to ensure you aren’t buying something you can’t afford. If you use it, make your payments on time, so you are also eligible for future use of the program.

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