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Buy now, pay later (BNPL) loans may feel "free" at checkout, but if you fall behind on a payment, the cost may be extremely expensive. It's way too easy to split a purchase into a few payments, forget about it, and then have the charges start stacking against your budget.
BNPL loans allow consumers to make payments in small installments, usually over several weeks. These short-term installment plans are good for small purchases and usually don't charge interest, which makes them affordable for people with lower credit ratings. However, when you are financing a large purchase (like a $1,500 laptop) or need more time to pay it off, a 0% intro APR card usually beats BNPL. A good 0% intro APR credit card can give 18 to 21 months to pay off balances interest free.
Credit cards also carry protections BNPL doesn't match. BNPL services are generally not as regulated as credit cards, which means you don't get strong protection and dispute resolution options.
Here are other reasons why a 0% intro APR card can be a better option for you:
- Credit building: credit cards are always reported to credit bureaus, and if paid on time, they allow you to build credit and score. BNPL loans are reported only when you are late with the payments, which means they can only hurt your credit.
- Rewards: credit cards often come with welcome bonuses and rewards for purchases that may turn into savings.
- One bill: every time you use a BNPL option to split your purchase, a separate plan is created with its own due date and amount. A card has one bill and a single statement you can easily track.
The only drawback of a 0% intro APR credit card is that you will typically need good to excellent credit to qualify for it. People with poor credit can hardly get access to 0% APR offers.
A 0% intro APR card wins because it buys you time, protection, and rewards that BNPL can't offer.
