Paytm’s BNPL vs Credit Cards- Here Is How To Choose The Right Credit Facility!

Credit card vs BNPL

Credit cards are a form of plastic money offered by the bank to the account holders. These cards are provided to the users with a certain predefined credit limit. The transaction limit can be set by the users as per their requirements or can be set by the bank as per the user’s eligibility. The value spent through the credit card should later be paid by the user along with the applicable interest. Besides, banks offer exciting deals to entice users or to push users to use credit cards.

BNPL or Buy Now, Pay Later is a facility offered by banks and digital payment applications like Paytm. It is a facility that offers instant credit to the users with a certain limit and many advantages.

The question of credit cards vs BNPL might look similar in nature but are a little different in terms of interest rates, features, advantages, limitations and more. Thus, in this blog, we will help you understand the difference between credit cards vs BNPL and how to choose the right one accordingly.

Credit Cards vs BNPL- What’s the Difference?

Credit cards are thin rectangular plastic cards in appearance. They are issued by banks and financial institutions to the users to let them purchase goods and services on credit. Banks and financial institutions impose a condition on the usage of credit cards. Users are required to pay back the credit amount along with the set interest rate back to the financial institution. When it comes to BNPL or Paytm Buy Now, Pay Later, it is a facility, specially curated to let a user purchase goods and services on instant credit. The credit amount up to Rs. 60,000 is instantly provided to the user. Following are the difference between credit card vs Paytm BNPL that makes both of them different from each other-

ParticularsCredit CardsBNPL or Paytm Buy Now, Pay Later
Offered byBanks and Financial institutionsBanks or Digital Payment Apps like Paytm
Interest ratesHigherComparatively lower
ConvenienceUsers need to follow the lengthy process to get credit cardsUsers can apply online to avail the facility
ApprovalTakes timeInstantly
Approval checkHard credit check to qualifyApproval was given without hard credit check
Impact on credit scoreLate payments impact the credit score highlyImpacts credit score
EMI time periodSet as per the userBorrowed amount need to be paid within 6 months
Credit amount providedAs per the requirement of the user or the credit limit a user requires (depends upon the terms & conditions of the banks also)Up to Rs. 60,000 only
AcceptanceAccepted by a major number of retailersNot necessarily accepted by all the retailers
PerksOffers perks like travel, rental insurance, and other exciting dealsIt depends upon the credit provider
Hidden chargesMight be thereNo hidden charges

An in-depth comparison between credit card vs BNPL

Listed below are the pointers that differentiate credit card vs BNPL in detail-

  1. Provided by
  • Credit cards are majorly offered by banks and financial institutions. A user is provided with a certain credit amount, which he/she has to pay after the set time period with interest
  • BNPL facility or Paytm Buy Now, Pay Later facility is offered by well known digital payment applications like Paytm. It is a facility provided to the full Paytm KYC-ed user
  1. Interest rates
  • Paytm charges interest on BNPL facility charges interest as per the credit lending partner. Besides, users are given a 30-day interest-free credit facility
  • Banks and financial institutions charge a set interest rate on the borrowed value which is comparatively higher than the BNPL facility
  1. Easy monthly installments
  • BNPL offers 6 months EMI option to the users
  • Financial institutions and banks provide EMI option as per the amount taken by the users
  1. Process
  • A credit amount up to Rs. 60,000 is instantly given to the users without a long & lengthy process
  • Acquiring a credit card from banks and financial institutions is a lengthy process and requires one to submit a lot of documents and proof of identity to get it. Apart from that, a user’s credit history is also considered before providing them with the desired credit amount
  1. Impact on credit score
  • BNPL affects the credit score of the user as Paytm coordinates with the credit bureau for the same. Considerably, the impact on credit score is somehow lower than the impact made by credit card delayed payments
  • Delay in the payment of credit card amount along with the interest rate negatively impacts the credit score. A lower credit score then affects one’s creditworthiness
  1. Credit amount
  1. Hidden charges
  • Credit cards often come with some sort of hidden charges like issuing fees, etc
  • Paytm does not charge any special charges while letting a user avail BNPL facility
  1. Acceptance
  • BNPL facility is not always accepted by retailers online or offline
  • Credit cards are accepted by a major number of retailers online and offline both
  1. Used by
  • Valid account holder only uses credit cards with an active bank account
  • BNPL facility can be used by active Paytm users with a complete KYC process

How to Choose the Right Credit Card?

Before choosing a credit card, it is advised to go through the below-mentioned points-

  • Compare banks or financial institutions and figure out who is offering better credit card based advantages
  • Check which bank or financial institution is offering the highest credit limit or the desired credit limit
  • Look for the exciting deals & rewards you are getting with the credit card
  • Compare the interest rates charged by the banks and financial institutions on the borrowed credit limit

How & Why Paytm’s BNPL is the right option for you?

The following points reflect how Paytm’s BNPL is the right option to get started with-

  • Instant credit of up to Rs. 60,000 is provided to the user
  • No interest is charged for 30 days on the borrowed amount
  • Users can divide the BNPL credit amount into 6 months EMIs
  • No hidden charges
  • No long documentation is required
  • An active Paytm user can use BNPL

How to Activate Paytm Buy Now, Pay Later or Shop Now, Pay Later?

Following are the few steps are required to activate Buy Now, Pay Later/BNPL/ Shop Now, Pay Later-

  • Login to the Paytm application and enter your passcode or use the fingerprint sensor
  • Click on the menu bar given on the right-left corner of the app screen
  • Click on ‘Paytm Postpaid’ and next on ‘Proceed’
  • Enter the required information like PAN name, contact details, DOB, registered bank, etc
  • Enter the registered mobile number to receive the OTP
  • Upon entering the OTP, the Buy Now, Pay Later feature will either be activated instantly or be put a user request on the waiting list

How to Use a Credit Card or How to Activate a Credit Card?

Below is how to activate a credit card

  • Login to the bank’s official website
  • Enter the internet banking login ID or credentials
  • Next, locate ‘Card Activation’ feature
  • Enter the card number, date of birth, expiry date and other required details
  • Click on ‘Submit’
  • Upon submission, a new screen will appear. Enter the ATM PIN there and submit the same
  • An OTP will be sent to the registered mobile number for confirmation
  • Enter the OTP and click on continue to activate the credit card
How much credit will I get with the credit card?
A credit amount provided with the credit card depends upon the requirement of the user.
Can I get a Rs. 30,000 credit through Paytm BNPL facility?
Users can get an instant credit of up to Rs 60,000 through the Paytm BNPL facility. It is advised to read the terms and conditions and other information given in the application for more clarity.
Who can use the Paytm BNPL facility?
Any Paytm active KYC users can use the Paytm BNPL facility.
Is it possible to encash Rs. 30,000 from Paytm BNPL facility?
No credit amount provided through Paytm BNPL can be encashed.
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