- Home
- Blogs
- Credit Card
- Bnpl Vs Credit Card Which Is Better
BNPL vs Credit Card: Which One Is a Better Option?
- Published on: 14 Mar 2024
Comparing BNPL vs credit cards will allow you to choose the ideal option for your shopping experience. You can use both options to facilitate larger purchases and settle your bill through small, manageable instalments. But to make the right choice, you must understand their features, benefits, drawbacks and what makes them different.
Read on to know more.
Credit cards give you access to revolving credit that you can use to manage various payments. This includes:
You pay for all the purchases made during the month through a one-time payment. However, many issuers now allow you to either pay the credit card bill or a specific payment in instalments. This typically attracts interest until you pay the entire amount.
On the other hand, BNPL is a facility which allows you to get short-term credit for select purchases from select merchants and retail stores. So, when you use this option, you don’t have to pay the entire cost at the time of purchase.
It will be paid in instalments or lump sum at a later date. This option generally doesn’t attract interest and the instalments for a tenure you choose. Note that in some cases you may have to make a downpayment to use this facility.
Also Read: What is Buy Now Pay Later?
Note these points to better understand and compare BNPL vs credit cards:
| Particulars | Buy Now Pay Later | Credit Cards |
|---|---|---|
| Interest Rate | Often, there is no interest if you pay the instalments on time | Attracts interest on the unpaid balance at the end of the grace period |
| Repayment | You can repay the amount with a comfortable EMI amount based on your chosen tenure | You can pay either the minimum amount or the total amount, which gives you the flexibility to pay the credit based on your budget |
| Credit Score | It may not require a credit check | Issuers run a credit check to assess your creditworthiness before approving the card |
| Eligibility | The eligibility criteria for BNPL are simpler | These have strict eligibility criteria |
| Accessibility | Limited merchant and partner stores have this facility | You can use it to shop anywhere, online as well as offline |
| Credit Limit | Generally, depends on the purchase amount. In case of fixed limits, it usually lower than credit cards | Depends on your credit score and financial profile. Good profiles can give access to a higher limit |
| Downpayment | Some merchants require a down payment | There is no downpayment on shopping with a credit card |
Here is an overview of the benefits and drawbacks to help you compare and choose from BNPL vs credit card:
| Advantages | Disadvantages |
|---|---|
| You can pay a fixed monthly instalment, which makes repayment and budgeting easy | There are no reward programs |
| You can choose an EMI amount that fits your financial needs | It is limited to a few merchants |
| It has a faster and simpler approval process | There may be late payment charges |
| It doesn’t require credit checks | It doesn’t help boost your credit score |
| Advantages | Disadvantages |
|---|---|
| You can easily pay the instalments over a longer tenure | Getting approval may take a long time |
| Using this card, you can pay for many types of expenses | The interest rate can make the borrowing costs high |
| It allows you to earn cashback, rewards, miles and more | You may get rejected if you have a poor credit score |
| There are other benefits, such as welcome benefits, insurance, air miles | There may be additional fees and charges |
You can determine which option suits your needs by comparing these advantages, drawbacks and the differences in their features. If you decide on a credit card, you can opt for the Fibe Axis Bank Credit Card.
It is India’s first numberless credit card, adding an extra layer of security. You can earn cashback of up to 3%, make seamless UPI payments and enjoy a host of other benefits. There’s also no annual fee, joining fee, or renewal fee, making it easy on your pocket. Download the Fibe Loan App or apply on our website to get your card!
FAQs on BNPL vs Credit Card
There are several differences and here are some points to compare BNPL vs credit cards:
When comparing Buy Now Pay Later vs credit cards to choose the best option, you must analyse your finances and requirements. For instance, if you opt for BNPL, you can enjoy staggered payments without a credit check at select stores. But if you opt for credit cards, you need a score and use it to pay at any store accepting credit cards.
