AO Finance aims to provide customers a new easy and affordable payment option on purchases at the online retailer.
Its headline APR is 19.9 per cent. It says this is 5 per cent lower than Currys (24.9 per cent), 10 per cent lower than Argos (29.9 per cent) and 20 per cent lower than Very (39.9 per cent).

Customers who sign up to AO Finance before 25 September and spend at least £299 on their first purchase can receive £25 cashback.

AO Finance is available across all products online with no minimum spend needed and will appear as a new payment option for customers when they checkout.

Customers wanting to use the new service will need to complete a one-time online application process to apply for credit and set up their account.

After this, AO Finance will inform customers of their eligibility, including credit limit and APR before a credit check is complete and logged on their credit file.

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Once customers’ accounts are activated, they will be given a credit limit which they’ll be able to use whenever they want to, without the need to reapply for credit each time they wish to purchase another product.

David Lawson, managing director of AO.com, said: “As we approach an important time of year, customers want options while shopping and AO Finance gives them lots of choices, way beyond what they have had before.”

AO Finance is provided by consumer finance provider NewDay.

Ian Corfield, chief commercial officer at NewDay, said: “We are delighted to have partnered with AO.com to offer AO Finance to its customers. The addition of this new payment option will be beneficial to customers as they can now pay for products in a more flexible way to better suit their needs.”

AO launched AO Mobile last month, offering contract and handset-only deals from the four major mobile networks.