How Does Zilch Work?

With Zilch you can use Buy Now Pay Later (BNPL) when you shop at retailers throughout the UK. It's a virtual Mastercard that you can use at stores and while some stores may have a fee to use the card, other stores allow shoppers to use their Zilch account free of charge.

Zilch is not a lender but allows shoppers to split up payments for purchases over six weeks. You can use the Zilch app to manage your credit limit and payments and view card details.

Let's take a closer look at how Zilch works and how you can use it to pay in stores.

What is Zilch? 

Zilch is a way to use the BNPL service in stores throughout the UK.

You will be handed a virtual Zilch card, which makes Zilch slightly different from other BNPL services. You must first choose the store you want to use, which you can do on the Zilch app or website before activating the virtual Zilch Mastercard.

After that, you can use the Zilch card to order your items and then subsequently pay for them. 25% of the total cost of the item must be paid upfront, and the remaining amount must be paid in equal installments every two weeks (during a six-week period) at a rate of 25%.

Here's an example:

Say you want to buy new trainers for £90. Your first payment will be £22.50 and due at checkout. Then, two weeks later, the second payment of £22.50 is due. Two weeks after that, another £22.50 and two weeks after that, the fourth and final payment of £22.50.

Zilch encourages shoppers to spend responsibly and not end up with debts they can’t repay, which can lead to defaults on their credit reports. 

How Zilch works

There are essentially two ways to use Zilch. You can Pay in 4, or Pay in 1 and earn 2% cashback.

If you choose to Pay in 1, you'll receive 2% back in rewards.

If you make a purchase and reach the checkout, if your amount is more than your available spend, it will be added to your first payment at checkout. The rest will be paid over six weeks.

You can use Zilch Rewards any time you want by simply choosing Zilch Rewards before you enable your card. The rewards will then be put towards your next purchase.

When you pay in full or refer friends, you'll be rewarded. With Zilch Rewards, you can use your rewards toward your next purchase, or save up for something special.

If you need more time to make a payment, you can tap on 'Snooze' and you'll be given four more days to make your payment. Keep in mind that the Snooze function incurs a small fee.

Here are some features of using a Zilch account:

• Pay zero interest. Purchases through Zilch are interest-free.

• Pay in 4. You can spread your purchases in four equal payments.

• Zilch Anywhere. An upgrade that allows some customers to pay with Zilch at a long list of brands it has partnerships with, as well as those it doesn't, as long as they accept Mastercard. In this case, a £2.50 fixed fee will be charged.

• No charges for early repayment. There are no fees for making early repayments on your Zilch account.

How much does Zilch cost?

It doesn't cost anything to use Zilch unless you skip payments.

Does Zilch do a credit check?

In order to confirm your information and determine your creditworthiness, Zilch performs a soft credit check. This won't have an effect on your credit score and won't show up on your credit report to other people. However, if you view your own credit report, you'll be able to see the soft inquiry.

Zilch provides you with its own credit score to assess what credit limit you qualify for based on the results of its "soft" credit inquiry. This won't have an impact on your credit score overall.

Pros and cons of using Zilch

Here are some of the pros of using Zilch:

• Buy Now Pay Later. Order what you want and pay for it later.

• No interest. You can purchase items interest-free with Zilch.

• No early payment fees. You can repay your account early with no penalties.

• Use anywhere Mastercard is accepted. Unlike some other BNPL providers, Zilch works anywhere Mastercard is accepted.

• No late fees or hidden fees. You will never get nasty surprises and the only time you may pay more is when you want to shop at a store that does not partner with Zilch.

• Virtual card. Zilch cards are virtual so no need to wait for an actual card.

Here are some of the cons of using Zilch:

• Some retailers charge extra. If you pay with Zilch at a retailer that isn’t a partner you will pay £2.50 more when checking out.

• Can hurt your credit. Zilch reports any missed or late payments to a credit reference agency, so it could hurt your credit.

• Payments can’t besuspended. You can’t have payments suspended while you wait for a refund to be processed by a retailer. Some other BNPL providers do. 

FAQs

Which cards can I use with Zilch?

You can link your Zilch virtual card to any UK-issued debit card.

When do I make my first payment?

You make your first payment (25%) at the time of purchase.

Where can I get my Zilch card details

You can log in online and view the search box in your account to choose your retailer. Then tap the green card to view your full card details. If you have the app you can go to Settings and then to My Cards. Tap the green card to see the card details.