In the current era, people can buy anything they want without fretting about the availability of funds in their wallets. Thanks to multiple credit options like Credit Cards and Buy Now, Pay Later which enhances the purchasing power of the people.
These options have eliminated the trouble for people to go all the way to banks and ask for a short-term loan to meet their urgent needs.
While the loan process with banks can eat up a lot of time and might involve paperwork, options like credit cards and BNPL can get the job done instantly. Today, almost every financial institution is offering these credit facilities.
Now if you are wondering which of these options is more effective than the other? And which one to use for which kind of spending/purchases? We are here to help you make the right choice before the blog ends.
First things first, let’s understand What Are Credit Cards?
A credit card is a form of financial instrument issued by banking institutions with a predetermined credit limit. The card allows users to buy all sorts of goods online and offline without any hassle. And upon the due date, the credit cardholders need to repay the money along with interest, if any. The cardholders get to enjoy cash backs, discounts on frequent purchases, rewards, etc. Also, for up to 50 days, most cards do not require users to pay any interest on the amount used.
Now, not everyone gets approved for their credit card request, especially those from lower-income groups and self-employed. But those who get a pre-approved limit can explore unlimited buying options like making online and offline purchases, booking flights, travelling abroad, and paying at fuel stations, restaurants, etc.
Next let’s look at Buy Now, Pay Later
Buy Now, Pay Later is another financing option that enables people to make purchases right now and pay for them later. This mode of payment has become pretty popular these days, notably when people buy online. The best part of BNPL is that they get approved very swiftly when compared to credit cards where the application may take a few days to get processed. Most players are offering many offers and rewards for using BNPL as a mode of payment.
Okay, so the big question here’s Which Is a better option among Credit Cards And Buy Now, Pay Later? That’s a hard one to pick, right? Well, actually not. If we look at their advantages and disadvantages, the choice shall become rather clear.
Here is a brief comparison between the two.
- Though both the products have some terms and conditions that every user must meet. The approval process for Buy Now, Pay Later is instant as opposed to a few days for a credit card.
- BNPL facility can be availed by users with no previous credit history or low credit score which is extremely rare in the case of credit cards.
- BNPL offers much faster one-tap payments compared to the conventional CVV and OTP-based authentication process of credit cards.
- Credit cards are accepted by most retailers/merchants as it has been there for some time. But Buy Now, Pay Later is also quickly increasing its footprints with all leading retailers and e-commerce platforms offering BNPL options in their payments.
- Both credit cardholders and BNPL users get a number of rewards and discounts on purchases made through them.
So, as you can understand by now that both Buy Now, Pay Later and Credit Cards do the job of providing financial assistance whenever necessary. But BNPL becomes a more viable option for people who are not able to secure credit cards because of a lack of credit history and low credit scores. The comparatively easier access to BNPL is one of the reasons behind its fast-growing popularity.
This ends the subtle difference between Credit Cards and Buy Now, Pay Later. You can also check out the Freecharge pay later on our app. It gives you an interest-free credit instantly for up to 30 days with which you can shop online/offline at 40,000+ stores with just one tap.