This story is part of Amazon Prime Day, CNET’s guide to everything you need to know and how to find the best deals.
Amazon’s Prime Day shopping events are times when many people are checking their budgets to see how much they can spend -- and how much they might save. Planning ahead for a purchase and then using a credit card to earn rewards is a sure-fire way to get the most from this event.
But when it comes time to check out, Amazon offers a number of different ways to finance your Prime Day order. You could opt for a layaway plan to help you avoid debt, enroll in a buy now, pay later plan, maximize your rewards with the Prime Visa card or use a different credit card with a special introductory 0% financing option. So which is the best?
We’ll walk you through the best way to avoid debt when making purchases during Amazon’s sales events, then run you through the pros and cons of each payment option.
What’s the best way to finance your Prime Day purchase?
How you pay for your Prime Day purchase comes down to your financial situation and how soon you can pay off your balance. However, if you’re hoping to avoid overspending and getting into debt, layaway may be your best option.
We like Amazon’s layaway option for a few reasons. First, there are no late fees or interest charges, and secondly, if you change your mind or find you can’t afford to keep making payments, you can get a refund for the full amount paid and cancel your order, with no impact to your credit score. But there’s one hang-up to be mindful of -- you pay biweekly over eight weeks and receive your order after the last payment is processed. So if you need an item now, this payment method may not work well for you.
This option also isn’t available for every item or in every state. If you live in Connecticut, Illinois, Maryland, Ohio, Washington, DC, or Pennsylvania, you won’t be able to use layaway.
But if you want to finance an Amazon Prime Day order and can’t wait eight weeks for your items, you could consider a Buy Now Pay Later plan, financing with the Prime Visa or another 0% introductory APR credit card. There are serious risks to all of these options though -- so we’ll walk you through what you need to know to select the right payment option.
Amazon and Affirm’s buy now, pay later offer
Amazon is partnered with Affirm, a leading BNPL company, to provide a buy now, pay later plan right at checkout for eligible purchases over $50.
Prime members can choose to split up purchases across four bi-weekly, interest-free payments or spread payments out across three to 48 equal monthly payments with an interest rate ranging between 10 and 30% APR. Non-Prime members can’t select the no-interest, bi-weekly payment option, but can spread payments out across three to 48 months, with an APR of 10% to 30% (select items may offer 0% financing).
Unlike credit cards, the BNPL interest rate doesn’t compound, making it slightly more affordable than charging a balance on a credit card with a similar APR for the same period of time. But you’re still likely on the hook for some type of interest charge, which we don’t like.
You’ll have to fill out some preliminary financial information before utilizing the monthly payment plan, but it’ll only result in a soft credit check, which means your credit score won’t be impacted.
Before you choose your payment plan, Affirm will show you how long it will take to pay off your balance and how much you’ll owe (if any) in interest. For certain loans, your payments could be reported to Experian, one of the three major credit bureaus.
Using a BNPL for a planned purchase could make the expense easier to manage if you have other financial responsibilities that month and can’t afford paying all at once. But since you’re making smaller payments over time, it’s easy to overestimate what’s in your bank account and can lead to overspending. We recommend using this option only if you’re sure you can comfortably make the payments on time without compromising other essentials in your budget.
Pros
Finance a payment over months
Avoid paying a large sum upfront
Soft credit check -- no drop in credit score to apply
Cons
Missing a payment could lower your credit score by damaging credit.
Won’t earn rewards
Can encourage overspending
Amazon’s 0% promotional financing option
Amazon also has a 0% promotional interest financing plan with some of its credit cards. The Prime Visa, for example, lets you divide purchases of $50 or more into six equal monthly payments with 0% promotional interest, or purchases of $250 or more into 12 equal monthly payments. After the promo period, a variable APR of 19.49% to 27.49% applies. You’ll just select to break down the purchase how you want at check out when using your Prime Visa card.
Keep in mind that choosing this financing option will replace your card’s rewards. So instead of earning 5% cash back for your Amazon purchases, you’ll spread out the payment over however many months you choose.
The Prime Visa also offers new cardholders an instant $200 Amazon gift card upon approval. An extra $200 could be useful when Prime Day rolls around again.
The card is a viable option if you plan to shop with Amazon outside of Prime Day, as well as if you want to build credit and earn rewards. However, if you don’t regularly buy things from Amazon, or you don’t want to add another credit card to your wallet, find something that may suit you better.
Applying for a new credit card will result in a hard credit check, which will typically lower your credit score temporarily. If you miss any credit card payments, that will damage your credit for the long term.
Pros
No interest for six to 12 months
Shopping protections
Cons
Hard credit check to apply
Higher credit requirement
Can damage credit if you miss payments
Use an introductory 0% APR credit card
An introductory 0% APR credit card features a promotional period where your purchases won’t accrue any interest for a set amount of time. A credit card that features a 0% introductory APR for new purchases will let you finance a planned purchase and pay it down, similar to a BNPL plan. However, there are a few major differences.
First, depending on the card, you may be able to earn rewards for the purchase. Secondly, your promotional 0% interest period typically runs from 12 to 18 months, after which you’ll start accruing interest. If you can’t pay off your balance before the introductory period ends, we recommend avoiding this payment option.
Pros
Potential to earn rewards
More time to pay down a purchase
Shopping protections
Cons
Requires a hard credit check
Can damage credit
Can encourage overspending
Requires high credit scores
If you decide a 0% introductory APR card makes sense for you, here are some options to consider:
Wells Fargo Active Cash® Card
- Intro Offer
-
$200 cash rewards Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Annual fee
- $0
- APR
- 20.24%, 25.24%, or 29.99% Variable APR
- Intro Purchase APR
- 0% intro APR for 15 months from account opening
- Recommended Credit A credit score is used to indicate an applicant’s credit worthiness and may provide guidance about account eligibility. It does not necessarily guarantee approval for any financial product.
- Good – Excellent
- Rewards rate
-
2% Earn unlimited 2% cash rewards on purchases
Bank of America® Customized Cash Rewards credit card
- Intro Offer
-
$200 $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening
- Annual fee
- $0
- APR
- 18.24% – 28.24% Variable APR on purchases and balance transfers
- Intro Purchase APR
- 0% Intro APR for 15 billing cycles for purchases
- Recommended Credit A credit score is used to indicate an applicant’s credit worthiness and may provide guidance about account eligibility. It does not necessarily guarantee approval for any financial product.
- Good – Excellent
- Rewards rate
-
1% – 3% Earn 3% cash back in the category of your choice (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases); Earn automatic 2% at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases); Earn unlimited 1% on all other purchases.
Wells Fargo Reflect® Card
- Intro Offer
-
No current offer
- Annual fee
- $0
- APR
- 18.24%, 24.74%, or 29.99% Variable APR
- Intro Purchase APR
- 0% intro APR for 21 months from account opening
- Recommended Credit A credit score is used to indicate an applicant’s credit worthiness and may provide guidance about account eligibility. It does not necessarily guarantee approval for any financial product.
- Good – Excellent
- Rewards rate
-
N/A This card doesn’t offer cash back, miles, or points
The bottom line
No matter which option you choose at checkout, they each have their advantages and disadvantages. While layaway is the best financing option to help you avoid debt, it’s still limited to select products and states and prevents you from receiving your items right away.
Credit cards can help build credit and earn rewards, but they could also ruin your credit and lead to overspending. Buy Now, Pay Later can help you spread out payments, but this payment option could charge higher-than-expected interest and also lead to overspending.
In the end, the most important thing to remember is to be responsible. Only spend money you have and don’t get enticed into spending more just to take advantage of a good deal. If you do accumulate debt, you may end up paying more overall for the purchase than if you had budgeted and bought the item outright -- even at full price. But if you need to finance a purchase now, compare your options and consider the risks before checking out.
The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.
