What is Zip (formerly Quadpay)?

Zip — formerly known as Quadpay — offers buy now, pay later, or BNPL, payment plans primarily through its mobile app. You can use the app to shop at many large retailers, including Walmart, Target, Home Depot, Sephora and more.

Zip's plans let you split your purchase into smaller, equal installments, so you don’t have to pay the full price upfront. It’s a similar financing option offered by other buy now, pay later companies like Afterpay, Klarna and Affirm.

Though NerdWallet typically recommends paying for purchases outright whenever possible, buy now, pay later plans could be a good fit for borrowers who need to cover a necessary expense and can afford the installments.

How does Zip work?

Zip is available anywhere Visa is accepted, making it an option at many retailers.

To use Zip, the lender directs shoppers to download its mobile app. You don’t technically need to download it to purchase items with Zip — you may also see a Zip button integrated on some retailers’ online checkout page — but you’ll get access to more stores using the app.

Once you’re ready to check out, Zip will display a pay-in-four payment plan, which splits the total price of your order into four equal installments that are due every two weeks, with the first payment due at checkout.

For example, if your total is $100, you’ll pay $25 at checkout. The three remaining $25 payments will be due every two weeks until you’ve paid the full $100. These payments are automatically billed to the debit or credit card you used to make the original payment, and Zip will send a reminder before billing you.

If you want to shop in-store, you’ll still download the app, enter a total purchase price and payment method, and then the app will give you access to a virtual in-store card that you can use to pay at the counter.

Though Zip says it doesn’t charge interest, it charges a $1 convenience fee for each payment, which is essentially interest. This means your purchase will cost an extra $4.

How to qualify: Zip assesses information you provide at checkout to approve you. The company doesn't share how it assesses customers, but looking at other BNPL companies, loan approval could depend on whether there are sufficient funds available on your debit or credit card, your history with the company and the purchase price.

Like other buy now, pay later providers, Zip does not conduct a hard credit pull, so applying for the service won’t affect your credit score. If you aren’t approved when trying to check out, it's likely because the company was unable to verify your identity or you did not meet its customer criteria.

Should you use Zip?

Zip may be a good option if you:

Need to cover an emergency expense: Since Zip payment plans are available at many stores through its mobile app, you could likely use this service to cover a needed expense you can’t afford all at once. We generally do not recommend buy now, pay later plans for discretionary shopping, like extra clothes, shoes or video games. Though these plans may seem straightforward, you’re still taking on debt.

Have bad credit or no credit: Zip doesn’t do a hard credit check, so it's an option if you need access to financing and have no other way to get it. Zip is a better choice compared with much higher interest loans like payday loans.

Zip is not a good idea if you:

Want a true interest-free loan: There are other buy now, pay later providers, like Afterpay and Klarna, that have similar plans but do not charge convenience fees. That means they’re more affordable and likely a better choice than Zip when possible.

Struggle with overspending: Like all buy now, pay later providers, Zip makes it easy to overspend since you have to pay only a quarter of the total price upfront. With particularly convenient features like a Chrome extension, you can use a Zip payment plan for almost anything, potentially intensifying spending issues.

Fall behind on payments: Many buy now, pay later companies charge a late fee, and Zip is no different. Its late fee can be $5, $7 or $10, depending on your state. Zip will also send outstanding borrowers to collections through an automated process, which could hurt your credit.

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