When it comes to using plastic, it is frequently said that a “light touch” experience—i.e., an ecosystem that facilitates cards to be obtained and money transfers to be settled with the fewest obstacles and most excellent ease—offers the most fantastic experience. As mentioned earlier, credit cards and buy now pay later (BNPL) cards are being provided, as these cards now provide seamless online and offline travel.
BNPL cards like Uno Card are a relatively new type of plastic-based payment compared to credit and debit cards. These are comparable to consumer borrowing limits accessible through the Visa payment mechanism.
The unique selling point of this facility is that the total expenditure is divided into three equal portions, each of which can be paid back over three months without incurring interest. Clients must face a hefty “carry forward” cost if they pay back less than the amount owed.
Compare the following factors in particular while evaluating buy now, pay later options:
- Which retailers utilise it
- Initial deposit required
- Required number of instalment payments
- Interest charges, if any.
- Fees, if any
- Purchase restrictions or exclusions
- Credit checks are necessary.
- Shipping regulations
- Policies for returns and refunds
Also, examine how a buy now, pay later agreement can affect your credit. Even while many BNPL companies run a mile credit check before approving a customer for a loan, if you fall behind on a payment and the company files it to a credit bureau, your credit score may suffer.
Two alternatives to think about when buying in-person or online are credit cards and buy now pay later arrangements. However, each has its benefits and drawbacks.
Buy Now, Pay Later
- You can apply online and nearly immediately be accepted.
- Be approved without a strict credit check that can harm your credit score.
- Pay for products over time, usually without incurring interest fees.
- Pick a payment schedule that won’t break the bank.
- It could be used for various things and at a broader range of retailers
- Pay off goods gradually, at your speed, and without instalment payments in advance.
- Earning potential for miles, points, or cash back from transactions
- Other benefits offered by cards may include travel or rental car insurance.
Both credit cards and Buy Now, Pay Later plans to offer benefits and drawbacks. If you qualify, applying for a credit card is advised because they typically offer more considerable credit limits for significant purchases. And you can select from such payment methods if you have a credit card. Before making it, you must always consider which purchase accounts for the time value and select your payment option accordingly. BNPL programs are typically best for low-value purchases. However, credit cards are advised if you want to turn the transaction into long-term EMIs. In contrast to BNPL, banks significantly lower interest rates for long-term loans/EMIs on credit cards. You can use BNPL for modest purchases even if you don’t qualify for credit cards.