Zilch buy now pay later: is up to 5% back any good?

Buy now pay later gets a bad reputation, and some of it is deserved. But the blanket "BNPL is dangerous" take misses something: not all BNPL apps work the same way, and one of them (Zilch) is genuinely different enough to be worth a proper look.

I signed up to Zilch in 2025 using a referral code, claimed the £5 free credit, and have been using it on and off since.

What is Zilch?

Zilch is a UK buy now pay later app, BNPL for short. It issues you a virtual Visa card, and on every purchase you pick one of two modes: split the cost into 4 payments over 6 weeks at 0% interest, or pay in full and earn 0.5% to 5% back in Zilch Rewards. The Standard plan is free; Extra (£2.99 a month) and Plus (£4.99 a month) are optional.

What makes Zilch different from other BNPL apps

The headline difference is universal acceptance. Clearpay only works at specific partner retailers, and so does Klarna unless you take a Klarna Card. Zilch gives you a virtual Visa card on its free plan, which means it works everywhere: online and in-store, including at the self-checkout in Tesco if you want.

That changes what BNPL can be used for. With Klarna, you're limited to whichever fashion or electronics sites have integrated it. With Zilch, you can spread the cost of a car service, a vet bill, or a birthday meal, for a fee of £3 to £4.50 through Zilch Anywhere if the place isn't in the app. Whether that's a good thing depends entirely on your self-discipline. More on that below.

How Zilch works day-to-day

You download the app, verify your identity (soft credit check, no impact on your score), and get a virtual Visa card. Add it to Apple Pay or Google Pay and you're set.

Every time you make a purchase through the app, you choose one of two modes:

Pay over 6 weeks (0% interest)

Your purchase is split into 4 payments over 6 weeks. The first, 25% of the price (50% on some plans), is charged immediately, then three more instalments follow at two-week intervals. There's no interest and no late fee, but there can be a purchase fee: none at thousands of stores in the app, up to £3 at other listed stores when you enable the card first, and £3 to £3.50 through Zilch Anywhere, each £1 more over £75.

Pay in full (0.5% to 5% back)

Pay upfront using your linked debit card and earn up to 5% back in Zilch Rewards at a store listed in the app, if you enable the card before checkout. Tap without enabling it, or use Zilch Anywhere, and the rate is up to 0.5%. The Rewards accumulate in your Zilch balance and come off future purchases; on the free Standard plan, only at stores listed in the app.

This second mode is what makes Zilch interesting even if you never want to spread payments. Up to 5% back at the stores in the app, and up to 0.5% anywhere else Visa is accepted, is more than most debit cards offer. I use this mode more than the instalment option.

Up to 5% back: is it actually good?

Compared to alternatives:

Yonder's rates need the caveat: 0.339p is the rate I've actually achieved across my own redemptions, not the 0.5p most reviews use, so Premium's 5 points per £1 is worth about 1.7% before its £215.88 a year in fees at £17.99 a month. Is Yonder worth it has the full ledger.

Up to 5% with no fee is strong where the app lists the store. The catch is you have to start every payment in the Zilch app: tap the card without enabling it first and you earn up to 0.5%, and on the free plan your Rewards only spend at listed stores. Plus, at £4.99 a month, raises the rates to up to 6% and 1.5% and lets Rewards spend anywhere, but on Rewards alone that extra percentage point covers its £59.88 a year only once you put at least £499 a month through Zilch. Some people find the app-first friction annoying; I find it makes me slightly more intentional about spending, which is probably a net positive.

What I actually use Zilch for

In practice, I use Zilch in two ways:

Pay in full for the Rewards: groceries, fuel, eating out. Anything I'd buy anyway. Tesco pays me 2% back; the Rewards are modest per transaction but compound across a month of everyday spending.

Pay over 6 weeks occasionally: for larger one-off purchases where I'd rather spread the cost without paying credit card interest. I've used it for a new pair of trainers and a vet bill. Both times the four instalments cleared without friction.

I don't use it for recurring subscriptions because managing them through the app adds complexity that a regular direct debit doesn't have.

The risks, and who should avoid Zilch

BNPL criticism exists for a reason. Here's where Zilch can go wrong:

Overspending is the obvious risk. The Pay over 6 weeks option makes purchases feel cheaper than they are. If you're someone who struggles with impulse buying, adding another way to defer payment is the opposite of what you need.

Missed payments can hurt your credit. Zilch reports to credit reference agencies. Miss an instalment and it can appear on your credit file. This is actually a good thing from a transparency standpoint: Klarna historically didn't report, which meant people accumulated BNPL debt that was invisible to lenders.

Multiple BNPL commitments stack up. Using Zilch, Klarna, and Clearpay simultaneously can mean you have several small debts across different apps that collectively add up to a large commitment. Track everything or use just one.

Who should skip Zilch:

• Anyone with existing debt they're struggling to manage
• People who tend to impulse-buy and regret it later
• Anyone who doesn't want to manage payments through a separate app

Zilch vs Klarna vs Clearpay: the full comparison

Zilch wins on flexibility, and on rewards away from the app. It works anywhere Visa is accepted and pays up to 0.5% back on purchases outside the stores it lists, both on its free plan; Klarna's cashback on every purchase starts on its £9.99-a-month Plus plan. In the apps both pay more on their free plans: up to 5% at the stores Zilch lists, and up to 7% at Klarna's participating stores (opens in new tab). Klarna has a wider retailer integration for its checkout flow, but Zilch's Visa card means you're never locked out of a store.

On sign-up rewards the gap is wider than the table row suggests. Zilch's £5 lands once your ID check clears, with no purchase and no subscription. Klarna's £10 needs a paid monthly plan first, from £4.99 a month after a £0.99 first month, then 3 purchases of £10 or more inside 30 days, and Klarna excludes gift-card top-ups, bill payments and cash withdrawals from what counts. Klarna figures checked October 2026 on Klarna's refer-a-friend page (opens in new tab), which sets them per campaign, and its card plans page (opens in new tab).

Is Zilch worth signing up to?

If you're disciplined with money: yes. Up to 5% back on pay-in-full purchases at the stores in the app is genuinely useful and costs nothing on the free plan. The instalment option is there when you need it, with no interest, no late fees and no fee at thousands of those stores.

If you're not confident about managing deferred payments, a regular bank account like Monzo with built-in budgeting tools is a safer starting point than any BNPL app.

The £5 free sign-up credit makes it risk-free to try: you get the reward just for verifying your identity, no purchase required.

Zilch FAQs

Is Zilch safe to use?

Yes. Zilch is authorised and regulated by the FCA. It performs a soft credit check at sign-up which does not affect your credit score. However, missed payments on the Pay over 6 weeks plan could be reported to credit reference agencies.

Does Zilch affect your credit score?

Signing up does not affect your credit score: Zilch uses a soft check. But if you use the Pay over 6 weeks option and miss payments, this could appear on your credit file.

Is Zilch better than Klarna?

Zilch works anywhere Visa is accepted on its free plan, while Klarna is mostly limited to partner stores unless you use the Klarna Card. Both pay cashback for free at stores listed in their apps, up to 5% at Zilch and up to 7% at Klarna, but only Zilch's free plan also pays on other purchases, up to 0.5%; Klarna's cashback on every purchase starts on its £9.99-a-month Plus plan. For flexibility and universal acceptance, Zilch has the edge.

Can you use Zilch in shops?

Yes. Zilch gives you a virtual Visa card that works at any retailer (online or in-store) that accepts Visa. You add the card to Apple Pay or Google Pay for contactless in-store payments, or order a physical card for £4.99.

You might also like

• Yonder referral code: £10 off, 2 months free and up to 20,000 points
• Monzo mystery reward: why links pay up to £20 or up to £50

Useful links (official resources)

• Zilch homepage: https://www.payzilch.com/ (opens in new tab)
• FCA Financial Services Register: https://register.fca.org.uk/s/ (opens in new tab)
• Citizens Advice on buy now pay later: https://www.citizensadvice.org.uk/debt-and-money/borrowing-money/using-buy-now-pay-later/ (opens in new tab)

Ad Get your £5 Zilch sign-up reward here. (opens in new tab)