How To Pick Between BNPL And Online Credit Card for Shopping?
These days, you can get a credit card online and sign up for the Buy Now, Pay Later (BNPL) facility digitally. While a card gives you access to instant credit, BNPL allows you to enhance your purchasing power without straining your budget.
How BNPL Works
With BNPL, you request your retailer to revise your purchase amount into multiple installments for your preferred tenure. It usually requires you to make an upfront payment as the first installment. Retailers also charge you interest for this credit facility, and the rate depends on the issuer’s policy.
The installment amount remains fixed throughout the tenure, including your principal and interest. You have the option to prepay the amount and close the loan early. In case you miss the installment, retailers charge you a late fee. BNPL is thus similar to a loan.
How Shopping With A Credit Card Works
You can use a card offline and online multiple times and pay for your desired products and services up to the credit limit. The only catch is that you need to repay the amount you have spent to the credit card company by the due date. Between your transactions and the due date, you get a grace period. During this time, there is no interest on the amount you have used.
This gives you time to shop for any planned or unplanned needs immediately and to arrange funds later. Paying your full credit card bill by the due date also helps you save on additional costs, such as interest on the overdue balance.
When you pay with a credit card, you can also get discounts, depending on the credit card company and your specific purchase. Using a card also helps you earn reward points, which you can redeem for a range of perks.
BNPL: Pros and Cons
Here are all the benefits and drawbacks of the BNPL facility that allows you to split bills into installments.
Pros | Cons |
| Fixed installments help you maintain a budget | Does not help you earn any reward points |
| Allows you the flexibility to choose a comfortable EMI by choosing the ideal tenure | Does not help you build a credit score |
| Instant approval with an easy application process | May attract high interest rates |
| Does not require a credit check | May require an upfront payment |
Credit Cards: Pros and Cons
Here are some points to compare if you opt to use plastic money for your purchases.
Pros | Cons |
| You can pay your dues anytime within the grace period | Getting a credit card requires a high credit score |
| May not attract interest if dues are paid within the grace period | Approval may take time |
| Allows you to earn rewards, discounts and cashback | May include annual and joining fees and other charges |
| Covers more than one purchase based on your credit limit | If the bill is not paid within the grace period, it attracts high interest and late payment penalties |
One more aspect to keep in mind is that when you pay with a credit card, you can also opt for the EMI facility. This allows you to split big bills across a tenure of your choice and repay them with ease.
By comparing these facilities, you can easily choose the best option for yourself based on the kind of purchase you plan to make. If you’re looking for a way to enjoy a number of shopping perks and easily get a credit card online, go for the One Credit Card. One benefit it offers is that you can earn 5X reward points on your top two spending categories every month.
You can also easily convert all your bills into no-cost EMIs on the One Credit Card app. In addition, it offers exclusive discounts on a range of purchases. Apply online for this lifetime-free premium metal credit card to enjoy all these benefits.