How Does Zilch Work: A Guide to the UK Buy Now Pay Later Service
Looking for a way to spread the cost of your shopping without paying interest? How does Zilch work in the UK?
In this guide, we’ll explain everything you need to know about this popular buy now, pay later service, how to use it both online and in-store, and what to watch out for.
Key Takeaways
- Understanding Zilch Payments: Learn how Zilch lets you spread payments over 6 weeks with Pay in 4 or over 3 months with their newer payment option, all without charging interest.
- Using Zilch In-Store and Online: Find out how does Zilch work in store with the virtual Mastercard and how to use it at thousands of UK retailers.
- Managing Your Zilch Account: Get tips on tracking payments, building your credit score, and using Zilch responsibly to avoid issues with missed payments.
What is Zilch?
Zilch is a UK-based buy now, pay later (BNPL) service that provides a virtual Zilch card to customers. Unlike some BNPL services, Zilch gives you a virtual Mastercard that works at thousands of retailers both online and in physical shops. Since its launch in 2018, Zilch has grown to serve over 4 million customers in the UK.
Zilch is regulated by the Financial Conduct Authority (FCA), which gives customers additional consumer protections compared to some other BNPL providers. This regulation means that purchases over £100 are covered under Section 75 of the Consumer Credit Act, giving you extra peace of mind when shopping.
How Does Zilch Card Work?
The virtual Zilch card works like a Mastercard but with added payment flexibility. When you sign up, Zilch performs a soft credit check which doesn’t affect your credit score. You’ll then be given a personalised credit limit based on your circumstances.
To use your Zilch card, you simply log in to your Zilch account via the website or Zilch app, search for the retailer you want to shop with, choose your payment method (Pay in 4 or Pay in 1), tap “Enable card” to activate your virtual card for that purchase, and then use the provided card details at checkout.
The virtual Zilch Mastercard can be used anywhere that accepts Mastercard payments, making it extremely versatile for both online and in-store shopping.
Payment Options with Zilch
Pay in 4 (Over 6 Weeks)
This is Zilch’s standard payment option. How does Zilch payments work with Pay in 4? You pay 25% upfront at the time of purchase as your first payment. The remaining amount is split into three equal payments over the next 6 weeks. Each payment is automatically taken from your linked UK issued debit card every two weeks with no interest to pay, making this truly interest free. Your fourth and final payment completes the purchase.
For example, if you buy trainers for £100, your first payment would be £25 at checkout, followed by three more payments of £25 every two weeks until you’ve paid the full amount.
Pay over 3 Months
Zilch has recently launched a new option to pay over 3 months. How does Zilch pay over 3 months work? This works similarly to Pay in 4, but extends your payment period. You make a 25% upfront payment, and then the remaining balance is spread over 3 months instead of 6 weeks. This option is designed for larger purchases (£75+) and still offers interest free payments (though fees may apply). It’s a great way to help spread the cost of bigger items.
Pay in 1 (Earn Rewards)
If you prefer to pay in full, you can pay the entire amount upfront and earn up to 5% back in Zilch rewards, which you can use on future purchases.
How Does Zilch Work In Store?
Many people ask how does Zilch work in-store and how does a Zilch card work when shopping in physical shops. Here’s what you need to know:
Open the Zilch app and search for the store where you want to shop. Choose your payment option (Pay in 4 or Pay in 1) and tap “Enable card” to activate your virtual card. View your Zilch card details in the app, enter these details at the payment terminal in store, and complete your purchase!
You can use Zilch at any store that accepts Mastercard payments, from supermarkets like Asda (how does Zilch work with Asda) to clothing stores and electronics retailers.
Zilch Anywhere Feature
If you want to use Zilch at retailers not directly listed in the app, you can use the “Zilch Anywhere” feature. Simply select “Zilch Anywhere” in the app (a fixed fee of up to £2.50 may apply) and use your virtual Zilch Mastercard at any retailer that accepts Mastercard.
This feature makes Zilch incredibly flexible for shopping online and in store.
Fees and Costs: How Much Does Zilch Cost?
Zilch aims to be transparent about costs. There are no fees for creating an account, no hidden fees with standard Pay in 4, no interest on payments, and no late fees for missed payments (unlike some other BNPL services). There is a small fee for using “Snooze” to delay payments, and fees may apply for Pay over 3 months and Zilch Anywhere.
The Zilch cost depends on how you use the service. For most standard purchases through Pay in 4, there are no additional costs if you make all payments on time.
Credit Checks and Credit Score Impact
When you sign up, Zilch performs a soft credit check that doesn’t affect your credit score. However, Zilch does share your payment history with credit reference agencies.
This means making payments on time can help build your own credit score, but missed payments could negatively impact your credit rating. Zilch reports to the UK’s leading credit reference agencies.
This is actually a benefit compared to some other BNPL providers, as responsible spending with Zilch can help improve your credit history over time.
Managing Your Zilch Account
The Zilch app (available on Apple App Store and Google Play Store) makes it easy to manage your account. You can track upcoming payments and due dates, see your remaining balance on each purchase, make early repayments if you wish, view your available spending limit, check your repayment schedule, and use the “Snooze” feature for additional payments time (for a small fee).
Is Zilch Safe and Secure?
Zilch prioritizes security with FCA regulation that provides consumer protections. Purchases over £100 are covered by Section 75 of the Consumer Credit Act. Zilch responsibly promotes responsible spending and equal installments make budgeting easier. The company encourages users to only make purchases they can afford.
Potential Drawbacks
While Zilch offers many benefits, be aware of potential downsides. Your credit score can be impacted if you miss payments. There’s also the temptation to overspend beyond your means. Some features and payment options may include fees. And your credit limit may be lower than expected initially.
Overall
Zilch offers a flexible way to manage your shopping expenses with its buy now pay later service. The virtual Zilch Mastercard makes it easy to use both online and in store, while the option to pay in four equal payments or over 3 months gives you control over your finances.
By reporting to credit reference agencies, Zilch also helps users build their credit history while making interest free payments. Just remember to use Zilch responsibly and only make purchases you can afford to repay to avoid any negative impact on your credit score.
Whether you’re making everyday purchases or spreading the cost of larger items, knowing how does Zilch work can help you make the most of this popular payment service while shopping at your favourite stores.
Frequently Asked Questions
How does Zilch credit card work?
Zilch isn’t actually a credit card but a virtual Mastercard that lets you split payments. It works similarly to a credit card but with fixed repayment schedules.
How does Zilch work with credit card?
You don’t need a credit card to use Zilch. Instead, you link a UK-issued debit card to your Zilch account for repayments.
How do I get started with Zilch?
Download the Zilch app, sign up with your details, link your debit card, and wait for approval. The process typically takes minutes.
What happens if I miss a payment with Zilch?
Unlike some BNPL services, Zilch doesn’t charge late fees, but missed payments can affect your credit report and future eligibility.
Can I make early repayments with Zilch?
Yes, you can make early repayments at any time through the app without any penalty.
Does Zilch affect my credit score?
Zilch performs a soft check that doesn’t impact your score, but Zilch shares payment information with credit agencies, so your payment behavior can affect your score.
What’s the difference between Zilch Classic and Zilch Plus?
Zilch Classic is the standard Pay in 4 option, while Zilch Plus refers to additional features like Pay over 3 months for larger purchases.
Is there a maximum credit limit with Zilch?
Credit limits vary by user but can go up to £2,250 for eligible customers. Your limit may increase over time with responsible spending.
