Your Money: Credit cards, BNPL or EMI cards — What’s best for you?


But if you want more benefits credit cards can prove to be more beneficial than both EMI cards and BNPL, provided you clear your dues in full on time.

By Adhil Shetty

People usually prefer a low-cost, convenient and safe instrument while making payments for shopping, booking travel tickets, hotel rooms, etc. Instruments like credit cards, EMI Cards, and Buy Now Pay Later (BNPL) are gaining popularity among people who require instant credit facilities to meet their spending needs.

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However, these three instruments have different features and benefits. So, which one works better for you? Let’s compare these three instruments to help you make an informed choice.

Credit cards
Credit cards offer up to 50 days of interest-free periods, EMI options on eligible spends, joining gifts, promotional offers, cashback, reward points, etc. Banks offering credit cards charge an interest fee of 3-4% per month in addition to a late payment fee if you fail to clear even the minimum amount due within the interest-free period. Also, premium perks at times are available only on high-end card variants that usually also charge a membership fee.

It is important to apply for a credit card you are eligible for and whose benefits are aligned with your spending patterns. Credit cards need to be used in a disciplined manner so that the total dues are cleared every month to avoid interest penalties and an adversely impacted credit score.

EMI cards
EMI cards are like pre-approved loan tools that can be used to purchase things on instalments from networked merchants without paying any interest. EMI cards are simple to understand and easy to use and EMI card companies allow foreclosure of the outstanding amount without levying any penalty charges.

Buy Now Pay Later (BNPL)
You can use this facility to purchase things without making any immediate payment and make the actual payment at a later date. BNPL issuers allow 15 to 45 days of interest-free period to make the payment. The due amount is auto-debited from the user’s bank account on the payment date. However, if you fail to repay the due amount within the prescribed period, the issuer levies interest as per the applicable rates. BNPL users can convert dues into EMIs if they don’t want to repay the full amount on the payment date provided they opt for it at the time of making the payment to the associated merchant.

What works for you?
Go for a product that suits your needs and costs you less. Benefits like cashbacks, air miles, reward points and facilities like special discounts, airport lounge accesses, etc., can make a big difference, so credit cards can be a good option if you are looking for a single solution. Many credit card customers are also eligible for pre-approved loan facilities at competitive interest rates making them a great tool during an emergency.

EMI cards and BNPL are helpful if you want to use them at their network merchant stores or associated brands. If you are looking for a spending instrument just for availing credit facility or you’re not eligible for your desired credit card, you can compare between EMI cards and BNPL to find the best match. These could also be availed quickly in comparison to non-pre-approved credit cards. But if you want more benefits credit cards can prove to be more beneficial than both EMI cards and BNPL, provided you clear your dues in full on time.

The writer is CEO, BankBazaar.com

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