BNPL: For those who love credit card payment offers but hate using the card
Credit cards have quickly become the dominant form of payment in India, emerging as lucrative financial instruments that enhance an individual’s purchasing power and improve the cardholder’s lifestyle. But even though it looks like a modern product, it has been around for many decades and some of its aspects are real drawbacks for customers.
If you’re a long-term credit card user, you’ve probably gotten used to living with these credit card drawbacks, and why not? Credit card offer offers and discounts that make shopping a pleasant experience.
If so, we have an alternative for you! But before we get to that, let’s start by understanding the pros and cons of a credit card in detail.
WHAT IS A CREDIT CARD?
A credit card is a financial instrument that entitles its holder to a line of credit, so there is no need to pay in advance for a purchase. Payment can be made later, in a lump sum or in EMI. The line of credit has a fixed limit up to which you can instantly borrow money. There is interest charged on this money.
By this basic definition, credit cards are excellent utilities for financing large purchases and splitting payments into EMI. They also encourage you to shop around by offering a myriad of discounts, offers, and perks. These benefits vary from card to card, depending on your credit limit and the premium of the card.
Perks can be a big plus for frequent shoppers or just people who need to make a certain number of purchases each month, such as airport lounge access, online shopping reimbursements, and airline miles (if applicable). Credit cards are widely accepted in the market, which means that there are virtually endless possibilities for enjoying these benefits.
Frequent credit card use and paying bills on time can also increase your credit score over time. This can therefore also be considered a big plus.
WHAT ARE THE DISADVANTAGES OF A CREDIT CARD?
A credit card, despite all its great features, is not without its downsides. Let’s take a look at them:
- Ease of use is a big advantage of a credit card, but it can quickly become its biggest drawback. If not used wisely, it can quickly become an instrument for accumulating debt.
- The interest rate applied on the borrowed amount is higher. Note that interest is usually charged on the amount carried over to the next month. It is therefore crucial to pay the full amount due on time.
- Credit cards often have many hidden costs and fees associated with them.
- Annual fees for credit cards that offer many lucrative benefits can be higher.
- Credit cards have an element of exclusivity, as the credit limit is decided based on a background check of your credit history. So someone who has a lower credit score but is financially stable right now might not qualify for a credit card.
BNPL – THE ALTERNATIVE
With the pandemic giving impetus to cashless payments, India has witnessed a payment paradigm shift from cash to digital modes. In this increasingly cashless landscape, Buy now Pay later (BNPL) emerged as an alternative to credit cards.
BNPL works similar to a credit card, in which you make a purchase without paying anything out of pocket at the time. Payment is made later to the BNPL company within a predetermined period. These systems began to offer cards very similar to traditional credit cards. A good example is the Lazy Card from LazyPay.
WHAT ARE THE CHARACTERISTICS OF THESE DIGITAL CARDS?
The best feature of digital maps that use the BNPL scheme is inclusiveness. When you sign up for the card, no credit checks are performed and you are instead given a base credit limit, to start with. As you use the service, your credit limit increases. The limit can be anywhere between Rs. 2000 and 5 lacs.
Signing up is also easy. All you have to do is download the mobile app and log in with your credentials. Basic information such as your mobile phone number and PAN number is required.
The significant difference from a credit card comes in the form of low or no interest on the amount borrowed, with no hidden fees or annual fees. These digital cards are offered by BNPL companies totally free for life. So you can spend without worrying, and spending also helps improve your credit score!
And finally, these digital cards are almost universally accepted in the market and offer many rewards and benefits, which are the same for all cardholders, regardless of their credit limit.
So if you are an active credit card user and need something better, digital cards like Lazy Card from LazyPay are the best options for you.
Check out their website today and discover a new world of financial freedom!
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