Credit Cards Vs BNPL Cards: Know The Difference

 

Credit cards are a typical lending option provided by lenders and financial institutions. Depending on the predetermined amount, the user may utilize the card to make transactions. These borrowed funds are paid back completely or even in parts on the following payment date, along with interest and any additional fees that may have been assessed. Now the "buy now, pay later" (BNPL) is a relatively brief financing plan made available for user purchases. With BNPL, customers are able to buy something now and repay it with recurring monthly EMIs afterward.

Which is therefore superior? BNPL or that time-tested, reliable credit card? The brief response is that it is dependent upon your personal situation.

Following is the difference between these two cards:

Credit cards:

Users can quickly access credit with the best credit cards, eliminating the need to hold off on buying necessities until they get paid the following month. In situations where people require rapid availability of money, credit cards might sometimes come in handy. As a result, if people utilize their credit cards sensibly and properly, they stand to gain countless advantages, including rewards, cashback, and travel benefits.

Features:
  • A credit card can be obtained by either an online or offline method. Moreover, the credit card qualifying conditions are simple to meet, and just regular documentation is necessary to obtain a card.
  • An additional advantage of having a credit card is the ability to withdraw funds via ATMs during an emergency.

Buy Now, Pay Later cards:


Whereas credit cards have expensive charges, BNPL is clear-cut, straightforward, and swiftly repaid. Buy Now Pay Later is a form of payment that lets users postpone their total billing, as the title would indicate. Customers who do not want to put their purchases on hold till payday can buy products now and pay for them later by using the Buy Now Pay Later option.

Features:
  • Pay for products over time, usually without any interest fees.
  • It's convenient. Anyone can submit an application online and get approval pretty much immediately.

Basis

Credit cards

BNPL cards

Joining fee

Varies on the type of credit card and issuer.

Buy now, pay later cards have zero joining fee.

Deals and discounts

Numerous incentives are provided by credit cards to encourage the use of the card.

There are offers that are mostly comparable, however, the maximum discounts are capped.

Credit limit

Credit limitations are entirely based on an individual’s ability to pay, credit rating, and provider's risk tolerance.

Depending on the earnings, credit history, and provider, it might vary between Rs. 2,000 to Rs. 10 lakhs.

Rewards 

Credit cards are popular for providing great reward benefits. 

BNPL cards also offer rewards and cashback but only up to a certain fixed percentage. 

EMI options

Customers may divide the sum across EMIs of up to 36 months following the initial fifty days of interest-free credit.

Currently, no-cost EMIs are only permitted for a total duration of three months.


Bottom Line:

Buy now, pay later options helps to simplify to make purchases in-person or digitally as well as repay those off very fast, frequently without paying extra charges. As always, whether anyone decides to make a transaction using a BNPL plan or a credit card is based on their individual circumstances, the cost of said item, their credit history, as well as the way they typically use credit cards. 
 

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