Buy Now Pay Later or Credit Card: Which Is Better For You?

Ashvin Sharma Credit Card Show

Using plastic money has always been a popular way of purchasing goods and services as credit cards come with an interest-free period. Now, there is an alternative to credit cards that works somewhat in a similar way. ‘Buy Now-Pay Later’ or BNPL finance lets you keep buying the stuff you need and pay at a later date. A word of caution: Like credit cards, BNPL may also land you in debt if not used properly and only aimed at instant gratification.

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How does the ‘buy now, pay later model work?

Indians have always been familiar with the Khaata system of payments, wherein customers would pay the entire bill in one go, typically by the end of the month, instead of paying every time they make a purchase.

Are credit cards passé? Can this replace credit cards?

The traditional credit card has evolved into ‘Pay-later’ because it truly reflects the way millennial consumers want to buy and pay. Consumers across the globe are looking for better products that offer convenience, peace of mind, transparency, and affordability. Credit cards don’t align with the value system of today’s millennial consumers. The reason being high-interest rates, fees, and low transparency. It’s not a good fit, especially for those who are relatively new to credit and are at risk of getting stuck in a debt trap.

What advantages does it have over credit cards?

The explosive adoption of ‘pay-later’ across the globe proves that there is an incredibly strong product-market fit for ‘pay-later’ as a category because pay-later options are interest-free, transparent, and beautifully embedded into the checkout flow of the merchant.

What is the interest-free period for the user?

We do not charge customers for utilizing our services, the app is absolutely free to use. Once the bill is generated, we provide 5 additional days to our users to clear their bill, and if the bill remains unpaid beyond that, we charge a late fee of up to Rs. 250.