Using credit cards has become a habit of individuals nowadays and that is the reason why the demand for credit cards is increasing day by day. Keeping this in mind, a lot of e-commerce companies and digital payment service providers have started providing their customers with the ‘Buy Now Pay Later‘ option that allows individuals to make purchases for which they can pay later. It is very similar to credit cards, but not exactly the same. You might have heard of ‘Flipkart Pay later,’ ‘Amazon Pay Later, ‘Paytm Postpaid,’ etc. All these facilities are examples of the ‘Buy Now Pay Later’ options. But, how is BNPL different from credit cards? This article will make you understand the same. Keep reading to know more:

buy now pay later vs credit card

Difference Between ‘Buy Now Pay Later’ Option & Credit Cards


In general, it is easier to get approved for ‘Buy Now Pay Later’ than for credit cards. When you apply for credit cards, the card issuer may take up to 30 days or even more to approve or reject your credit card application. But, in the case of BNPL (Buy Now Pay Later), your application is approved or rejected instantly after applying for it. Other than this, you need to have a credit history in order to get a credit card and the ‘Buy Now Pay Later’ option gives you an opportunity to build your credit score from scratch. You may get approved for BNPL even if you don’t have a credit score, but a stable source of income.

Credit Limit

Credit cards offer a higher credit limit as compared to the Buy Now Pay Later options. Credit Cards can provide you with a credit limit of up to 10 lakhs per month or even more, but you won’t get such a high limit with the BNPL options ever. For example, Flipkart allows you to avail of credit up to Rs. 10,000 under Flipkart Pay Later facility.


The cardholders can use their credit card anywhere and make any type of purchase, but this is not in the case of the Buy Now Pay Later option. Generally, online shopping apps and digital payment services-based apps like Paytm provide you with the BNPL facility and you can use this for selected purchases only. For example, you can use the ‘Amazon Pay Later’ facilities to make purchases on Amazon only, and similarly ‘Flipkart Pay later’ can be used to make purchases on Flipkart. However, Paytm Postpaid can be used for a lot of purposes, including mobile/DTH recharges, Departmental store purchases, ticket bookings, and many more.

Interest-Free Period

With credit cards, you can avail of an interest-free period of up to 50 days, including 30 days of the billing cycle and 18-21 days of the grace period. But, Buy Now Pay Later options generally don’t provide you with such a long interest-free period, but it will only be of up to 35-45 days. However, some Buy Now Pay Later providers may even offer you a longer interest-free period, but it will hardly be longer than that provided by credit card issuers.

Also read: How To Use Credit Card Interest-Free Period Wisely

Impact On Credit Score

Using both, the Credit Cards and Buy Now Pay Later options, can impact your credit score equally. Therefore, you should make sure to pay the bills on time, no matter if you are using credit cards or BNPL. You should also keep other factors like credit utilization ratio, the average age of accounts, etc in mind in order to maintain a good credit score. It is always better to use both, credit cards and Pay later facilities so that you can maintain a good credit mix.

Suggested Read: Everything You Need To Know About Credit Score

Bottom Line

Now, you might have understood the difference between Credit Cards and Buy Now Pay later options. Both are advantageous in their own ways. Buy Now Pay Later options can be used to make selected purchases only whereas you can use credit cards to make any purchase of your choice. Also, you get a lower credit limit with BNPL, but it doesn’t make the facility disadvantageous by any means. Even if you are using credit cards, you can consider signing up for the BNPL option on different platforms in order to maintain a good credit mix. It will only help you build your credit score if you use it responsibly and make the payments on time.

If you have any further doubts regarding the topic, you can freely ask us in the comment section below!

1 Comment

  1. garani Reply

    One more difference if you use credit card you will earn points but not sure about pay later whether they have that facility or not heard of it

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