BNPL vs Credit Card: Which One Is a Better Option?

  • Published on: 14 Mar 2024
BNPL vs Credit Card: Which One Is a Better Option?

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. 

Buy Now Pay Later and Credit Card: An Overview 

Credit cards give you access to revolving credit that you can use to manage various payments. This includes:

  • Utility bills 
  • Shopping expenses 
  • Fuel payments 
  • Dining bills 

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?

Buy Now Pay Later Vs Credit Card: Key Differences

Note these points to better understand and compare BNPL vs credit cards:

Particulars Buy Now Pay LaterCredit Cards
Interest RateOften, there is no interest if you pay the instalments on timeAttracts 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 tenureYou can pay either the minimum amount or the total amount, which gives you the flexibility to pay the credit based on your budget
Credit ScoreIt may not require a credit checkIssuers run a credit check to assess your creditworthiness before approving the card
Eligibility The eligibility criteria for BNPL are simplerThese have strict eligibility criteria
AccessibilityLimited merchant and partner stores have this facilityYou can use it to shop anywhere, online as well as offline
Credit LimitGenerally, depends on the purchase amount. In case of fixed limits, it usually lower than credit cardsDepends on your credit score and financial profile. Good profiles can give access to a higher limit
Downpayment Some merchants require a down paymentThere is no downpayment on shopping with a credit card

Pros and Cons of BNPL Service and Credit Cards

Here is an overview of the benefits and drawbacks to help you compare and choose from BNPL vs credit card:  

Buy Now, Pay Later

You can pay a fixed monthly instalment, which makes repayment and budgeting easyThere are no reward programs
You can choose an EMI amount that fits your financial needsIt is limited to a few merchants
It has a faster and simpler approval processThere may be late payment charges
It doesn’t require credit checksIt doesn’t help boost your credit score

Credit Cards

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 

What is the difference between a buy now pay later and a credit card?

There are several differences and here are some points to compare BNPL vs credit cards:

  • BNPL is often interest-free and credit cards attract interest on the unpaid balance
  • Credit cards require a credit score check, but BNPL providers may not check your score 
  • BNPL results in fixed monthly instalments for a predetermined tenure, whereas you generally make one-time payments to pay for all your purchases during the month
  • BNPL may include a downpayment, while credit cards don’t generally have this requirement

Which is smarter: buy now pay later or 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.


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