Splitit personal loan review

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In a Nutshell

Splitit offers a unique buy-now, pay-later experience, using available credit on your credit card to allow you the chance to pay for a purchase in installments without interest. There’s no credit check required. But the list of retailers that accept Splitit may seem somewhat limited.
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Pros

  • No application or credit check
  • No interest or fees charged by Splitit
  • Shorter- and longer-term repayment options

Cons

  • Limited to Splitit partner merchants
  • Can make credit card use more complicated
  • May lead to interest and fees through your credit card issuer
  • Debit cards are not accepted

What you need to know about Splitit

Splitit is a buy-now, pay-later service that taps into your existing credit limit to help you buy items from partnering retailers and pay off those purchases, and Splitit will not directly charge you interest.

There’s no credit check to qualify, but Splitit works with a limited pool of retailers. And it’s not like other buy-now, pay-later loans that give you additional credit for purchases. Splitit works with the available credit you already have on your existing cards — it won’t add to your buying power.

It uses your existing credit instead of creating a new loan

With traditional BNPL services like Afterpay and Sezzle, you’re essentially applying for a short-term loan to help you pay for an online purchase. Then you make regular installment payments until the loan is paid in full, often with no interest.

But Splitit doesn’t create a new loan. Instead, it taps your current available credit on your credit card. When you go through the checkout process, Splitit will check to see if you have enough credit to cover the entire purchase amount.

The merchant then places a hold on your card for the full amount and collects the first payment. The hold remains on your card until you’ve paid in full, but it decreases each time you make a payment.

Because Splitit is leveraging your existing credit instead of creating a new loan, it doesn’t require a credit check or even an application. If you have enough available credit on your card, you’re good to go.

No interest or fees charged by Splitit

Splitit doesn’t charge interest or fees for its service, so it’s possible to avoid interest charges even though you’re paying off your purchase over time. But since you’re using a credit card to make payments, you may be subject to your card’s interest and fees if you don’t pay your balance in full every month or if you miss a payment.

And if you don’t pay Splitit, they may remove your right to pay in installments and charge the outstanding amount to your credit card as a purchase, which would then be subject to interest and fees.

It’s also important to keep in mind that when a pre-authorization hold is placed on your credit card, you can’t use that portion of your credit line. For example, if you have a card with a $2,000 limit, a $1,000 balance and an $800 hold, you really only have $200 of available credit.

The service has some limitations

You can only use Splitit with its partner retailers. You can find the store directory on the company’s website, but if your chosen retailer isn’t on the list, you won’t be able to use the service. Also, Splitit currently only works with Mastercard and Visa credit cards. If you only have an American Express or Discover credit card, you’re out of luck.

A closer look at Splitit  

If you’re planning to buy something using Splitit with one of its retail partners, here are some other important factors to keep in mind.

  • Installment options can range from three to 24 months, depending on the retailer.
  • Retailers decide the minimum and maximum purchase amounts.
  • Debit cards are not an eligible payment option.
  • You’ll earn rewards on your credit card with all monthly installments.
  • Your first installment payment will either be charged immediately or once the item you’ve purchased ships.

Who is Splitit good for?

Splitit can be a good option for someone who’s planning to make a large purchase with one of the BNPL service’s partner merchants and can’t afford to pay off the full balance immediately. Getting a chance to spread out your payments fee-free and interest-free could help you save money.

Also, if your credit isn’t great, you don’t have to worry about getting denied, since there is no credit application.

But if you don’t have a Visa or Mastercard credit card, you can’t use the service. And if you only have one credit card or your credit limit is relatively low, you might not want to lock up a large chunk of your available credit for several months or even years while you pay down the debt.

How to apply with Splitit

There is no application to use Splitit. Simply choose it as your payment method when you check out with one of the BNPL service’s partnering merchants.

Keep in mind, though, that you need to be at least 18 years old and have an eligible credit card to use the service. Also, you’ll need enough available credit on your card to cover the full amount of the purchase.

Not sure if Splitit is right for you? Consider these alternatives.

If you’re thinking about using a BNPL service, but want to compare options before you move forward, here are some alternatives to consider.

  • Klarna: You can use the service to make purchases with any U.S. retailer that accepts Visa.
  • Afterpay: The service can be a good option for smaller purchases that you can pay off over a shorter period.

About the author: Ben Luthi is a personal finance freelance writer and credit cards expert. He holds a bachelor’s degree in business management and finance from Brigham Young University. In addition to Credit Karma, you can find his wo… Read more.