May 16, 2023
Durga Prasad

BNPL vs Credit Cards: Which Is the Better Option for You?


In India, we have a wide range of payment alternatives, including BNPL (Buy Now Pay Later) and credit cards. Each of these solutions has its own set of features and drawbacks, and which one is best for you is determined by your financial situation and spending habits. We'll compare BNPL and credit cards in depth in the following article.

What is BNPL?

Simpl, LazyPay and ZestMoney are some of BNPL (Buy Now Pay Later) services that let Indian customers buy things and pay for them in instalments. Typically, you'll pay a portion of the overall amount and this  is being paid out over a few weeks or months. BNPL services are particularly suitable for the Indian Customers who are on a limited budget and need time to pay the whole amount over time.

Pros and Cons of BNPL


No interest: Unlike credit cards, most BNPL services do not charge interest on purchases. Instead, they make money by charging consumers a commission fee.

Convenience: BNPL services often have a simple and easy-to-use checkout process, which can be a big plus for Indian consumers who want to complete their transactions quickly.

Flexibility: BNPL services typically offer a range of payment options, such as paying in 4 or 6 instalments, which can give Indian customers more flexibility when it comes to managing their finances.


Late fees: If you miss a payment deadline, you may be subject to late fees, which can add up quickly.

Overspending: BNPL can make it easier to overspend, as Indian consumers may be tempted to make purchases they wouldn't normally be able to afford if they were paying upfront.

Limited availability: Not all merchants accept BNPL services, so your options may be limited.

What are Credit Cards?

Credit cards are a popular payment option in India that has been around for decades. They work by allowing customers to borrow money from the bank to make purchases. The bank charges interest on the borrowed amount, and the customer must pay back the borrowed amount plus interest within a certain time period.

Pros and Cons of Credit Cards


Rewards: Many credit cards in India offer rewards programs, such as cashback or airline miles, which can be a big plus for consumers who use their cards frequently.

Build credit: Using a credit card responsibly can help you build credit, which can be important if you want to take out a loan or apply for a mortgage in the future.

Wide acceptance: Credit cards are widely accepted in India, so you're likely to be able to use your card almost anywhere.


Interest: If you carry a balance on your credit card, you'll be charged interest, which can be high depending on your card's APR (Annual Percentage Rate).

Fees: Credit cards can also come with a range of fees, such as annual fees, late fees, and foreign transaction fees.

Temptation to overspend: Credit cards can make it easy to overspend, as you may be tempted to make purchases you wouldn't normally be able to afford if you were paying upfront.

Which Option is Better for You?

So, which payment option is better for you: BNPL or credit cards? The answer depends on your financial situation and spending habits. Here are some factors to consider:

Budget: If you're on a tight budget and need to spread out your payments over time, BNPL may be a good option for you.

Credit score: If you're looking to build credit, using a credit card responsibly can be a good way to do so

Rewards: If you're looking for rewards programs, credit cards are likely to offer more options than BNPL services.

Fees: If you're concerned about fees, BNPL may be a better option since most services do not charge interest and may have lower fees than credit cards.

Availability: If you're looking to make purchases at a wide range of merchants, credit cards are widely accepted in India, while BNPL services may have more limited availability.

Ultimately, the decision between BNPL and credit cards will come down to your personal preferences and financial situation. It's important to carefully consider the pros and cons of each option before making a decision.

If you decide to use BNPL, be sure to read the terms and conditions carefully and make sure you understand when payments are due to avoid late fees. If you decide to use a credit card, make sure to pay your balance on time and in full each month to avoid interest charges and fees.


 So, both BNPL and credit cards are popular payment options in India, each with its own set of advantages and disadvantages. When choosing between the two, it's important to consider factors such as your budget, credit score, rewards programs, fees, and availability. By carefully weighing your options and making an informed decision, you can choose the payment option that works best for you and your financial situation.


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