Monzo Flex review: is it the best way to buy now, pay later?

4 min Read Published: 19 Jan 2023

Monzo flexOnline bank Monzo entered the Buy Now, Pay Later (BNPL) market with Monzo Flex. The service allows customers to spread the cost of almost any purchase over 3, 6 or 12 months and is one of the newest entrants in the burgeoning BNPL field. It comes as the Financial Conduct Authority (FCA) continues to develop regulations for the sector. You can read our independent review of Monzo Flex to learn more about whether it it could be a good fit for your finances.

What is Monzo Flex?

Monzo was the first bank in the UK to launch its own buy-now, pay-later proposition. Monzo Flex, as the name suggests, is designed to offer Monzo customers flexibility in how they pay for goods and services. Customers have the option to pay transactions in 3 interest-free monthly instalments, or, alternatively, over 6 or 12 instalments at 24% APR variable. There is no charge for making repayments early and there is also the option to move from 3 to 6 or 12 instalments if the customer is struggling to make the repayments.

Unlike some other buy-now, pay-later firms, which partner with specific retailers and are offered to customers at the checkout page, Monzo Flex is available on most transactions as long as you have enough credit.

Monzo Flex key features

  • Users can spread the cost of transactions over 3 months, interest free
  • Payment plans also extend to 6 or 12 months at 24% APR (variable)
  • Section 75 protection on Monzo Flex purchases
  • Customers can go back over the previous two weeks and choose to spread the payments on past purchases 
  • Payments can be managed via the Monzo app, with customers able to make repayments early, at no extra charge, or extend the payment period
  • Use of Monzo Flex will be reported to the main credit reference agencies, Experian, Equifax and TransUnion, which means it is likely to impact users' credit ratings. This could be positive if it is used responsibly and payments are made on time but could have a detrimental effect if not

How does Monzo Flex work?

Monzo Flex works in much the same way as other buy-now, pay-later companies, such as market-leader Klarna, allowing customers to divide the cost of purchases into instalments. In the case of Monzo Flex, there is the option to pay in 3 monthly instalments without having to pay any interest, or, alternatively, to pay over 6 or 12 months, with interest charged at 24% APR variable.

Monzo customers go through a separate Monzo Flex application process, which starts with an eligibility check to see if you are likely to be approved. As this just involves a soft search on your credit file, it won't have a negative impact on your credit rating or be visible to other lenders. If you pass the eligibility check and choose to proceed, Monzo carries out a full credit check with one or more of the credit reference agencies, after which point you should be approved if the information you provided for the initial check was accurate and you meet the criteria. At this point, you are given a Monzo Flex credit limit and have a Flex balance listed alongside your usual bank details in the Monzo app.

When you want to make a purchase, you can opt to use Flex through the Monzo app, with the first instalment taken immediately and two subsequent payments taken at monthly intervals. You can also choose to move any payment from the previous two weeks onto a Flex payment plan of 3, 6 or 12 payments, with the initial payment taken and the remaining instalments refunded back to your account. There is no contactless limit on the virtual card and you can choose to flex any amount as long as there is enough available credit on your Monzo Flex account. You have the option of managing the payments through the app, making payments early or extending the repayment period.

What happens if you miss a payment on Monzo Flex?

Monzo states it doesn't charge a late fee for missed payments. Instead, it gives users a 7-day period in which to make the late payment, after which time it moves the plan from 3 or 6 months to 12 months. On that basis, it will then attempt to take the minimum payment - the equivalent of a monthly instalment on a 12-month payment plan - and you will be subject to interest at 24% APR variable. You will not be able to use Flex on any other purchases when you are behind on payments.

It is worth noting that late payments will be reported to credit reference agencies and so are likely to harm your credit rating. If you are persistently late with payments, your credit limit may be reduced or, in the worst-case scenario, outstanding debt could be passed on to a debt recovery agency.

Does Monzo Flex affect your credit score?

Monzo Flex is likely to affect your credit score with Experian, Equifax and TransUnion in the same way as any other credit product. As with a credit card or loan application, using the Monzo eligibility checker gives a good indication of whether you are likely to be approved, without leaving a hard "footprint" on your credit file. The full application, however, will appear on your credit reports.

In terms of using Monzo Flex, there is the capacity to use it to build your credit score if you demonstrate you can use it sensibly, make payments on time and stay within your credit limit. If, however, you miss payments, it will probably have a similar impact as missing credit cards or loan repayments.

Monzo Flex customer reviews

While there aren't specific customer reviews of Monzo Flex, Monzo itself has a high customer satisfaction score with the review site Trustpilot, with a rating of 4.4 out of 5.0. It is rated as "excellent", based on almost 25,000 customer reviews. The positive reviews mainly centre on the features Monzo has that allow customers to monitor and manage their spending, as well as good levels of customer service.

How to apply for Monzo Flex

Before applying for Monzo Flex, you will need to open a Monzo account. You do this by downloading the Monzo app to your phone and following the onscreen instructions, including providing a valid ID. You can then apply for Monzo Flex via your account.