BNPL VS Credit Card - Check Pros and Cons of BNPL and Credit Cards

✓ Fast Processing ✓ Great Discounts & Offers ✓ Easy EMI Facility | Apply for Credit Card now! Check Eligibility

Understanding Buy Now, Pay Later (BNPL)

Buy Now, Pay Later (BNPL) is a financing option that enables you to make purchases immediately and defer payment to a later date. Payments are usually made in small instalments, similar to EMIs. BNPL services are often provided by technology companies and are available when making purchases online or in physical stores. You can apply for a BNPL service online to access funds easily.

BNPL services provide a flexible way to split payments, often with low or no interest if paid on time. However, like credit cards, they have fixed repayment schedules, and missing a payment can lead to interest charges on the outstanding balance.

How Does BNPL Work

The Buy Now, Pay Later process in India is simple and enables easy, flexible payments. You can use this service by following these steps:

1. Select ‘Buy Now, Pay Later’ Option

Choose a partner store, either online or offline. While shopping, you need to select the BNPL option as your payment method.

2. Approval Process

After selecting BNPL, you have to complete a quick approval process. The process takes only a few seconds. Some BNPL providers may perform a soft credit check, which does not affect your credit score.

3. Choose Your Payment Plan

Once approved, you need to select a payment plan. These short-term plans usually extend over a few months. All terms, including any applicable fees, are explained at this stage.

4. Make the First Payment

The first instalment is typically due at the time of purchase. Your future payments are automatically withdrawn from your bank account or charged to your debit or credit card as per the agreed schedule.

BNPL vs Credit Cards: Key Differences Explained

Explore the key B uy Now Pay Later vs credit card differences to find the right payment option for your needs. The table below highlights the pros and cons of each to help you decide:

Topic	BNPL	Credit Card
Ease of Use	Easily convert bills into EMIs	May need to submit documents
BNPL vs credit card interest rates	Interest-free if paid on time	Interest charges on unpaid balances; avoidable with timely payment
Ease of Approval	Quick approval due to short-term, smaller amounts	May depend on good credit score and eligibility due to long-term commitment
Flexibility	Flexible repayment options (weekly, bi-weekly, or monthly) for short-term plans	Minimum due payments; flexible for the short and long term
Eligibility Criteria	Easier requirements to meet	Varies based on issuer and card type

Pros and Cons of BNPL and Credit Cards

Both BNPL and credit cards offer flexible payment options, but the best choice depends on your spending habits and financial goals. Understanding the pros and cons of each can help you make an informed decision.

Buy Now Pay Later		Credit Cards
Pros	Cons	Pros	Cons
Short-term interest-free instalments	Hefty fees for missed payments	Full balance payment avoids interest	High interest on carried balances
Quick approval with minimal credit checks	Works only with specific merchants	Responsible use builds credit history	Approval based on credit scores
Fixed instalments for easier budgeting	Easy approvals can encourage impulse spending	Flexible payments with minimum dues	Revolving credit may lead to overspending
Some providers report payments to credit bureaus	Late payments lower credit scores	Cashback, travel rewards, and discounts	Annual fees on some cards
No collateral or extensive documentation	Limited options for high-value purchases	Emergency credit for unplanned expenses	Fraud risks from theft or misuse

About Credit Cards Services

Credit Cards by Bajaj Markets’ Partners

Credit Cards by Non-partnered Providers

Do you pay interest on Buy Now Pay Later?

Yes, BNPL services have a repayment period. Failure to pay on time results in interest charges on the borrowed amount. Further delays lead to additional charges.

Where can I use the Buy Now Pay Later option?

BNPL is accepted at many online and in-store retailers. It is also available on some food delivery apps and other services. Ensure that the store is a BNPL partner before using the facility.

Why do people use the Buy Now Pay Later?

BNPL services allow immediate purchases without full upfront payment. Costs are split into smaller instalments, making larger purchases more manageable.

Is it safe to use Buy Now Pay Later?

BNPL is safe when used responsibly. Payments need to be made on time to avoid interest and penalties. Multiple missed payments can affect credit scores as issuers report defaults to credit bureaus.