Business
Buy Now Pay Later Cards Vs Credit Cards: What’s the Difference?
In the past few years, we have seen banks, e-commerce companies and even fintech players offer schemes for shoppers called Buy Now, Pay Later (BNPL). The BNPL is a financing option that allows shoppers to make purchases and pay for them at a future date with an interest-free period.
So, how does buying something using a credit card differ from using the Buy Now, Pay Later Scheme?
To know about credit cards and BNPL cards, visit: Buy Now Pay Later Cards Vs Credit Cards: What’s the Difference? (easyfie.com)
What Is Buy Now, Pay Later?
Buy now, pay later is a type of short-term financing. BNPL plans often charge no interest and no fees, with the exception of late fees for missed payments.
How Credit Cards Differ
Credit cards can be used at retailers. But they can also be used to buy gasoline, make utility bill payments, and accommodate other kinds of expenses. If the cardholder pays their balance in full each month, they won't owe any interest. Otherwise, their balance will accrue interest at the card's annual percentage rate (APR).
Buy Now, Pay Later vs. Credit Cards: Which Is Better?
Buy now, pay later plans and credit cards are both options to consider when making purchases online or in stores. But each has some advantages and disadvantages.
Pros of Buy Now, Pay Later
- Convenience: You can apply online and be approved almost instantly
- Get approved without a hard credit check, which can lower your credit score
Credit Card Pros
- Can be used at a wider array of retailers and for other purposes
- Pay off purchases over time at your own pace, without fixed instalment payments
- Potential to earn cash back, miles, or points on purchases