Credit cards

How are credit cards and Buy Now Pay Later cards different? – Advisor Forbes INDIA

When it comes to leveraging plastic, it’s often said that the most enjoyable experience is a ‘lightweight’ experience, i.e. an ecosystem that enables access to cards and settlement of transactions. with a minimum of obstacles and a maximum of ease. Credit cards and Buy Now Pay Later (BNPL) cards are offered on the above-mentioned basis, as these cards now introduce a seamless travel regime whether online or offline.

The Reserve Bank of India (RBI) introduced credit cards to the Indian market in 1980. However, the rapid increase in credit card issuance and concurrent use only came to the fore during of the past 10 years or so. The exponential increase below is attributable to multiple factors: breathtaking increase in e-commerce, wide acceptance of digital payments, maturation of the credit card industry in offering attractive offers, and above all, a sea change in consumers’ attitude towards spending.

For example, RBI data reveals that credit cards in force in March 2012 were 1.76 crore with an expenditure of INR 8,952 cr. Compare that with March 2022, when prevailing credit cards are 7.36 cr with a total spend of 1.07 lakh cr.

Credit Cards vs. Buy Now Pay Later (BNPL) Cards

Compared to credit and debit cards, BNPL cards such as “Slice it” and “Uni Card” are a relatively new method of plastic payments. These are similar to loan limits granted to consumers, accessible via the Visa payment platform.

The USP of this facility is that the total expenses are divided into three equal parts and this amount can be repaid over three months without interest charges. Customers have to pay a fairly high “deferral” fee if they repay less than the amount owed.

Credit score

BNPL cards can be made available even to customers who do not have a credit score. Moreover, since new borrowers are appropriately encouraged, the government’s goal of financial inclusion is also very well served.

Credit cards, on the other hand, are only issued to customers who have an existing and acceptable credit history, or those who have a good banking relationship with the issuing bank. Credit cards allow a user to spend for one month and then the full payment must be deposited within an additional 15-20 days, i.e. a credit-free period of up to 45 days . Thereafter, the consumer must be prepared to pay exorbitant interest charges.


Credit cards and BNPL cards work similarly, the main differentiation is based on credit limit offered, usage model, repayment structure, eligibility and value-added features loaded onto the cards. A detailed comparison can be seen in the table below:


Credit card holding costs are generally higher as there are membership fees, annual fees, reward redemption fees, etc., while BNPL cards have no membership fees. membership or annual.

These two types of cards cater to various market segments. BNPL cards are aimed at young adults who might benefit from credit for the first time, or customers who need cash support in their monthly expenses – a prevalent phenomenon in the post-covid scenario.

Consumer profile

Credit cards are aimed at a more mature customer who has a greater ability to spend on their card and take advantage of premium benefits. BNPL cards allow new credit users to be digitally onboarded seamlessly, and are therefore an effective way to improve plastic penetration and use.

Essentially, these cards help consumers with short-term cash: BNPL cards allow customers to split transactions over a three-month interest-free period. BNPL cards are still in their infancy, but industry innovation has indeed caught the attention of the market.

According to the RBI, the total number of active credit cards as of February 2022 is around 71 million, while the total number of active debit cards is 935 million. There is near-endless potential for all types of plastic card issuers, as the market remains grossly under-tapped.

Until now, only banks were allowed to issue credit cards; recent changes to the RBI guidelines allow (upon approval) Non-Banking Financial Companies (NBFCs) to issue credit cards as well. Intense competition is always good news for consumers.


Issuers should exercise due diligence when onboarding new customers, thereby ensuring a healthy portfolio; consumers should be cautious and refrain from impulsive spending, thus avoiding a ruinous debt trap.

Nonetheless, choose a plastic that best suits your spending habits, wise credit leverage will always improve your lifestyle.