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