Pay later playing cards or bank cards: which carry decrease prices?

Akin to a bank card, a Buy Now, Pay Later (BNPL) card lets customers make purchases and pay again over time in a number of installments. Both the choices additionally supply an interest-free reimbursement window. But, what’s the necessity of two completely different merchandise that serve the identical function? There are key variations within the price and rewards constructions of the 2 financing choices.

BNPL playing cards supplied by Uni and Slice let prospects divide the excellent invoice in three equal interest-free installments over three months. Uni permits its customers to pay a minimal quantity on the finish of the month and carry ahead the remaining steadiness. “We levy a carry ahead price of 3-4% on the remaining steadiness from that individual billing cycle when minimal due is paid,” mentioned Nitin Gupta, founder and CEO, Uni. Credit playing cards, then again, cost an curiosity on your complete remaining steadiness when minimal dues are paid. Slice doesn’t supply minimal due cost choice.

In pay later playing cards, if you’re unable to pay again the complete quantity by the tip of three months, you’ll be able to convert the due quantity in equated month-to-month installments (EMIs) for an extended interval. Gupta mentioned they don’t cost curiosity per se, however have late charges on default. “For the sake of clarification, the implied curiosity can vary from 16%-40% every year relying on the due quantity and the person’s reimbursement behaviour,” he mentioned. Interest charge charged by bank cards on excellent steadiness is among the many highest throughout mortgage classes at 36-42% annualised.

As for rewards, most bank cards supply rewards on every transaction that hold getting accrued and might be redeemed within the type of air miles, present vouchers, lodge bookings, and so forth., after a sure variety of factors are collected. Uni gives a flat 1% cashback if the overall quantity due is paid again by the tip of the primary month. Slice’s cashback scheme works within the type of ‘monies’. With every transaction, the person will get the equal variety of monies as the cash spent. The accrued monies might be transformed to cashback with the speed of conversion being 1%, 1.5% and a couple of% for monies steadiness as much as 3 lakh monies, between 3 lakh and 5 lakh monies and over 5 lakh monies, respectively. For instance, if a person has 1.5 lakh slice monies, they may convert this into ₹1,500 cashback (1% of 1.5 lakh).

In different smaller variations, bank cards can be utilized for transactions if you end up abroad, which paylater playing cards don’t permit. However, paylater playing cards can be utilized to make sure worldwide transactions from India. Further, BNPL playing cards give first-time customers a decrease credit score line starting from ₹2,000, which will increase extra time as per utilization and cost behaviour, whereas credit score restrict on bank cards sometimes begins from ₹20,000.

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