Bread

Bread https://www.breadpayments.com/ is a Buy Now, Pay Later (BNPL) lender that was recently bought by Alliance Data Systems (ADS). ADS is a major credit card issuer but most people have not heard about this company. Unlike Chase, Citi, American Express, and many other major credit card issuers, ADS does not put its name on the credit cards they issue. As of this writing ADS website says that they manage more than 145 branded credit programs, including Pottery Barn and Ulta. So who is Bread?

Bread was founded in 2014 and is based in New York. Bread provides two types of pay overtime solution at the point of sale (POS) – SplitPay and Installments. Even though both of these options are offered at the checkout, there are some key differences between these two.

SplitPay – It is intended for purchases under $1,000 with a minimum borrowing of $50. Borrowers pay the loan back in 4 equal payments, payments are due every two weeks and the loan has no interest (0% APR). There is no credit check for SplitPay. Similar to options from other Buy Now, Pay Later lenders, there is no prepayment penalty.

Installments – This option is intended for larger purchases and comes with monthly payment options from 3 to 48 months. The maximum one can borrow is $20,000 and it is offered in conjunction with a bank (Cross River Bank). We are not sure yet if the same bank will continue to fund the loans once ADS completes the purchase. The company runs a “soft” credit check, which does not impact customers’ credit bureau scores but they report loan repayment history to TransUnion. The TransUnion credit must be unfrozen for prequalification. The rate for this type of loan varies from 0% to 29.99%. They report late payments to TransUnion as well. Like others, there is no prepayment penalty with this option either. Borrowers cannot use a credit card to make payments.

We are interested in the way ADS will integrate Bread with the rest of the solutions they offer.