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Buy Now PayLater vs. Credit Cards
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Buy Now PayLater vs. Credit Cards

11/01/2021

Credit cards have often come to the rescue when you’re short on cash. Whilst our plastic friends have often had our back when faced with a large bill, in recent years a new form of payment has grown in popularity – Buy Now Pay Later (BNPL).

BNPL is a finance option that allows you to make purchases by splitting the cost into monthly payments, often interest-free. Currys, Ikea, ASOS, Pretty Little Thing, and Very.co.uk are just some of the big names offering the option as an alternative to credit cards.

But which one is better?

Buy Now Pay Later - 0% interest

Buy Now Pay Later allows you to split your bill into monthly instalments with no interest. Whilst some providers might charge late fees if the payment isn’t made on a certain date you won’t be charged any interest. Credit cards are often strict on paying your minimum balance and users are likely to face interest charges.

Buy Now Pay Later - an instant decision

BNPL is often applied for at the point of purchase meaning a fast application process. Bumper uses artificial intelligence and machine learning to make a decision based on a small amount of information provided, so you know if you’ve been accepted there and then.

Credit cards often have a much longer application process which means lots of form filling and a long wait before your card finally arrives in the post.

Both can boost your credit score

Both credit card and BNPL providers generally perform a credit check as part of their approval process and will make regular reports to credit agencies of your payments. This means you can use it to boost your credit score. Every payment made on time is a positive mark on your report.

Both let you spread large payments

Both credit cards and BNPL allow you to spread large bills into smaller payments. But be careful as a larger balance on a credit card could mean more interest.

Bumper is a Buy Now Pay Later provider for car repairs and servicing.

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*By using Bumper, you are taking out a form of credit. You must be 18+ & a UK resident to apply. There are no fees, no interest or additional charges, however missed payments may incur a £12 administration fee and may impact your credit score. In extreme cases, recovering missed payments may include using a responsible debt collection agency, or as a last resort, taking legal action. Bumper’s instalment credit products are not regulated by the FCA.