What Is Splitit and How Does This Payment Method Work?

Splitit is a payment solution that enables consumers to divide the cost of purchases into interest-free installments using their existing credit cards. This approach provides a flexible payment option for managing larger expenses without requiring new lines of credit.

What is Splitit

Splitit is a payment method that allows shoppers to convert their existing credit card credit into manageable, interest-free monthly installments. Unlike some other “Buy Now, Pay Later” (BNPL) services, Splitit does not involve issuing new loans or conducting hard credit checks. Instead, it leverages the available credit on a customer’s current credit card. This means consumers can use their existing purchasing power without a new application process or impacting their credit score.

How Splitit Works

When a consumer chooses Splitit at checkout, they select the number of installments for their purchase, typically ranging from three to 36 months. Splitit places an authorization hold on the customer’s credit card for the full purchase amount. This hold temporarily reduces available credit but is not an actual charge; only the first installment is charged at purchase. As each subsequent monthly installment is paid, the authorization hold is progressively reduced until the full amount is paid off and the hold is removed.

For merchants, Splitit integrates into their e-commerce platform, allowing them to receive the full payment upfront, minus any applicable fees. Splitit then manages the collection of remaining installments directly from the customer’s credit card.

Key Features and Advantages

Splitit offers distinct advantages for both consumers and merchants. For consumers, a primary benefit is interest-free installments, provided payments are made on time. No new credit applications or hard credit checks are required, so using Splitit does not impact a consumer’s credit score. Consumers can also earn credit card rewards on purchases since they are using their existing credit card.

For merchants, Splitit can lead to increased average order values (AOV) and higher conversion rates, as customers are more likely to make larger purchases when they can pay over time. It helps reduce cart abandonment and mitigate fraud risk by leveraging existing credit cards. Merchants also receive the full purchase amount upfront, improving cash flow and simplifying accounting.

Using Splitit: Important Considerations

To use Splitit, a consumer must have a valid credit card with sufficient available credit to cover the full purchase amount, as an authorization hold is placed for the total value. Splitit is only available at participating merchants, so consumers should confirm its availability at checkout.

Payments are scheduled monthly and remain interest-free, provided all installments are paid on time. While Splitit does not perform credit checks or report to credit bureaus, late payments or defaults on the underlying credit card account could still affect a user’s credit score. For returns and refunds, the process typically follows the merchant’s standard return policy; the consumer must contact the merchant directly for any approved changes.