You have come across different payment options when it comes to online shopping and paying for the product. You can either pay using your credit or debit card or there is another option of buy now pay later. You must be wondering how credit card has any difference then buy now pay later, consumer financing and how will it help you? Will buy now pay later consumer financing will do any good to save some money for you? Most people believe in BNPL because many of us have to face debt when we pay using a credit or debit card.
Some of us are in debt of home loans, MSME loans, educational loans, vehicle loans, etc. BNPL provides you with transparency for your payment. You can buy your products now and pay in installments. Not everyone can pay the whole amount of their product at once BNPL provides you with this transparency to buy now and pay for it later.
In this may you can save yourself from going into deep debt. Like in credit cards you have to pay interest when you choose an installment payment option but in BNPL you don’t have to worry about paying extra money. But what are the massive difference when it comes to paying using a credit card or choosing buy now pay later consumer financing?
Below are some of the differences between a credit card payment and BNPL:
Application Procedure
When it comes to opening an account we all know how to hassle it is when it comes to a credit card. But you can open a buy now pay later account instantly without much hassle. It is easily accessible than a credit card. You don’t have to worry about all those long processes while opening an account it doesn’t include any income assessment, credit checks, or more. You get more freedom when it comes to buying now pay later account than a credit card.
Interest
When it comes to the best credit card in India, you have to pay a certain amount of interest to the bank when you choose to pay in installments using a credit card. This is how banks make money out of the customer’s pocket. But on the other hand BNPL option is easy and in most cases, you don’t have to pay any interest. You don’t have to pay any extra amount when you choose to pay using buy now pay later financing. Even if you have money on your credit card you have to pay some interest every month to the bank. With BNPL you save the interest you have to pay with a credit card that makes BNPL better than a credit card.
Card Holders
The amount of credit card holders is low. When it comes to the new generation most of them don’t even have a credit card. If you are only providing your customers with a single payment method then you are losing most of your customers. The present generation is more into buying stuff and paying for it later and most of them don’t have a credit card. So the percentage of people who are using the buy now and pay later is more than those who are using a credit card.
Acceptance
Credit cards are accepted everywhere around the world. You can make your payment from anywhere using your credit card. Buy now pay later is offered by many buy it is still not available everywhere. BNPL is still growing and maybe it will replace the use of credit cards by many customers. Still many of the young generation prefer to use BNPL financing as it is providing them the transparency to choose other than just using a credit card.
Credit Limit
The credit card provides you with a credit limit so you can keep a check on your expenses. Even some BNPL services provide you with a limitation on your expenses. There is a limit on the amount of purchase you are doing this will help you to save doing into debt, but if you will always have a check on your balance whenever you are purchasing using a credit card. But the BNPL service lets you buy anytime any pay for an interval of time and if you don’t have the amount to pay for your products you will go into debt and your BNPL services won’t be able to save you.
Overall both credit card and buy now pay later offers their customers a great choice of buying products online. Credit cards are being used everywhere and by most people but the new generation chooses to prefer the buy now pay later customer financing as it is reliable, transparent, and saves you from going into debt. Most companies prefer the use of credit card payments by their customers as it is trusted by everyone. BNPL service is still developing and not many companies provide their customers with this service. Both the credit card and buy now pay later have their consequences.
If you fail to make your payment using BNPL services, you may get banned from using the service anymore and you won’t be able to buy anything else using the BNPL service on the other hand if you delay your payment using a credit card you have to pay interest which can put you in deep debt. But if you keep track of your expenses and if you want to save yourself from going into debt the best option for you is going with the buy now pay later customer financing as it gives you the flexibility and if you don’t own a credit card this will the best option for you.
You can save from paying monthly interest to the banks. And it is seen that the company who are providing their customers with BNPL service have seen significant growth in their sales because the young generation likes to buy their product now and pay later.
