As the name implies, buy now, pay later (BNPL) allows you to make a purchase without worrying about present finances and then repay it later. Although this is a small-ticket loan, it has grown in importance and popularity due to one essential factor: a convenient and smooth user experience. The cashless buy now pay later card is efficient, fast, and user-friendly. The most popular buy now pay later card apps in India currently are slice, uni pay card, onecard, zestmoney, Lazypay and many more.
Aside from the convenience a BNPL card gives, if you are loyal with the lender and pay your payments on time, this credit option may also help you build a positive credit report.
What is a BNPL card actually?
Customers may buy now and pay later with Buy Now, Pay Later, a short-term financing option. Customers must register with BNPL providers and authorize them to make payments on their behalf in order to use the BNPL service. A first-time BNPL user must undergo KYC requirements on the provider’s platform upon joining up. Each user will be given a credit limit when their account is activated, which they may use to make purchases. In the case of late payment, the user may be charged a penalty.
How is a BNPL card different from a credit card?
When you pay for items using a credit card, you just have to pay the minimum monthly payment due on the card. Unless you have a card with a 0% introductory APR, interest on the remaining balance will be there until you pay it off in full. A balance,however, may be maintained.
In contrast, BNPL contracts do not include any interest or fees. They do, however, have a predetermined repayment time, which is typically several weeks or months. You will be informed about how much you have to pay each time. It functions similarly to any other unsecured personal or loan.
Benefits of BNPL card
- Customers may buy things and pay for them over a variety of terms, ranging from 3 months to multiple years, depending on the supplier, enhancing the customer experience and removing friction.
- They can get their thing even if they don’t pay in full. Interest-free payments are available.
- You may apply online and get a decision very immediately.
- Purchases can be paid off in installments, usually with no interest costs.
- Pick a payment schedule that works for you (at some BNPL providers)
Buy Now, Pay Later Apps’ Future
The future of BNPL might be quite bright, since the concept will draw more people who want to buy anything they want right now. Most lenders who provide this service provide no-interest EMIs, which are anticipated to become the primary payment option in the future, particularly among the youth.
Although, at its core, it is still a sort of loan that the consumer must repay in the end. However, leaders will have to take care of the borrowers they are lending to, as not everyone will care to repay the debt on time. Customers must realize the consequences of failing to return the debt on time in order to prevent interest and a loss in credit score. The future of BNPL is bright as long as clients are able to make effective use of the facility and pay on time.
Youth currently want more types of BNPL cards as they face a lot of difficulty in managing their money. What BNPL does is give them the opportunity to buy whatever they want and pay afterwards in easy installments. The customers will not look at the drawbacks, but will always focus on the brighter side. This is why there is a chance that BNPL apps will expand in the near future.
The Bottom Line
The principle of BNPL is straightforward. Consumers receive a brief, interest-free loan to help them spread out payments on large or even little purchases. As a result, these are a huge help to those who are currently unable to use banking services. These cards are far more accessible than bank cards. Instead of stacking up large, high-interest revolving credit lines, these cards might be used responsibly to bring forward consumption.
Because a missed payment may result in a late charge and may have an influence on your credit rating, it is crucial to maintain financial discipline when making your repayments, just as it is with other credit options. To realize the benefits of a loyal customer, make sure you pay your BNPL amounts owing by the agreed-upon deadline. This not only will favor you in increasing your CIBIL score but also maintain a high CIBIL report. If you want to check the progress, you can check CIBIL score in India on many third party websites. You can also download your CIBIL report for free and look for any corrections.
