Buy Now, Pay Later (BNPL) Benefits Credit Cards Don’t Offer

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woman looking at financial papers while on the computer

Using the BNPL to spread out your purchases over time has some advantages over paying by credit card.

Jose Luis Pelaez Inc/Getty Images


  • Buy Now, Pay Later (BNPL) services allow you to spread out payments when you purchase an item.
  • You generally don’t need a high credit score to qualify, and often there’s no interest.
  • Make sure you have a plan to repay your purchase before you are tempted to use BNPL.
  • Read the Insider’s guide to the best credit cards with 0% APR offers.

One of my biggest financial goals this year is to try to reduce the amount I spend on my credit card each month. In 2021, paying my bill every month was overwhelming, mostly because my shopping habits shifted to online shopping more than ever during the pandemic.

To facilitate my efforts, I’ve removed all my credit card information from auto-registration on my favorite e-commerce sites. In the last three months alone, it has helped me reduce my credit card bills by 25% because I had to think about each item in my cart before I got up and manually entered my credit card information. .

However, most of my favorite websites are starting to offer the buy now, pay later (BNPL) feature which not only looks tempting but can sometimes be more beneficial to use.

Since I’m trying to use my credit cards less, I decided to look into some of the BNPL benefits that credit cards don’t have. Here is what I discovered.

Here we focus on the rewards and benefits that come with each card. These cards aren’t worth it if you’re paying interest or late fees. When using a credit card, it’s important to pay off your balance in full each month, make your payments on time, and only spend what you can afford.

BNPL does not generally require a good credit score

Regular APR

16.24% – 23.24% variable

Recommended credit score

good to excellent

Regular APR

16.24% – 23.24% variable

Recommended credit score

good to excellent

More information
  • Earn 80,000 bonus points after spending $4,000 on purchases within the first 3 months of account opening. It’s $1,000 when you redeem through Chase Ultimate Rewards®.
  • Enjoy perks like a $50 Ultimate Rewards hotel credit per year, 5x on travel purchased through Chase Ultimate Rewards®, 3x on dining and 2x on all other travel purchases, and more.
  • Earn 25% more value when you redeem airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 for one trip.
  • With Pay Yourself Back(SM), your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select rotating categories
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Baggage Insurance and more.

If you want to get approved for a credit card, you must meet certain criteria set by the issuer. You will need to show proof of income, established credit and a


credit score

that meets the issuer’s requirements.

Although credit card issuers are not always so transparent, each has their own range of credit scores that they require applicants to have. For example, to be approved for the Chase Sapphire Preferred® card, you’ll generally need a credit score between good and excellent (a FICO score of 670 or higher). Other cards, like the Capital One Platinum credit card, only require an average credit score, which Capital One defines as either defaulting on a loan within the past five years or not having a significant credit history. .

If you have a low credit score (which is defined as a score below 580) or have a limited credit history, using a BNPL service benefits you since these services do not approve you based on your income, credit score or credit history. .

All BNPL services approve users based on different criteria that range from verification of available funds in your bank account, your history of using that BNPL service, or available funds on your debit or credit card.

BNPL services generally do not perform extensive credit checks, which may affect your score

When you apply for a credit card, the issuer will often do a thorough investigation or “hard pull,” which is when they check your credit before making a lending decision. Usually, these difficult requests can lower your credit score by a few points, especially if you apply for several credit cards at once.

When it comes to BNPL services, some don’t do a credit check and some just do a “soft” inquiry, which doesn’t affect your credit score. Soft draws aren’t tied to an issuer lending you new credit, so they don’t carry the same penalty as hard draws.

BNPL does not charge automatic interest

Most credit cards charge interest on your remaining outstanding monthly balance, which depending on your APR can be over 20%. With most BNPL services, you generally don’t have to pay interest on your payments.

For example, if you buy an item for $500 and use a BNPL service, you might have a four-payment setup plan to pay it off over four months (at $125 per month). However, if you slowly try to pay off that balance on a credit card over the course of four months, with an APR of 20%, you will not only have to pay off the item over four months, but also the additional interest. .

Your payment schedule is more flexible

When it comes to refunding purchases placed on a credit card, you generally don’t have the ability to create payment plans to slowly pay that item off over time, unless you also pay the interest. (or you are using a 0% APR credit card). introductory offer which can often last 12 to 24 months before interest arises).

Each BNPL service offers payment plans that vary according to the number of installments you will pay to pay for that item.

For example, one of the most flexible BNPL services, Separate it, allows users to choose the number of installments that suits them and their budget. They also claim to never charge interest or late fees for payments. Some other BNPL services require an initial payment of 25% and three additional payments every few weeks.

You do not have to face any additional costs

Although credit cards come with rewards and perks that BNPL services don’t (like travel perks or cashback), many come with fees that a user must keep in mind. mind when opening and using their card to make payments. Credit card fees can include annual fees (usually between $49 and over $500 per year for premium cards), balance transfer fees, cash advance fees, transaction fees foreign country and late fees.

Many BNPL services have a simple relationship with you. Most don’t charge interest and some even allow you to postpone scheduled payments without any penalty.

If you’re willing to give up travel perks and cashback so you don’t have to worry about paying extra fees, then using an BNPL service is something you should consider.