Using Buy Now, Pay Later (BNPL) vs. credit cards for your purchases
Quick insights
- You might prefer to use a credit card for a purchase when you can afford to pay it off in full by the end of the billing cycle.
- To spread out the cost of a large purchase across multiple payments, you may want to consider a Buy Now, Pay Later (BNPL) plan.
- You can use a strategic mix of credit cards and BNPL to maximize the benefits and minimize the drawbacks of these payment methods.
With multiple options available, you might be weighing the pros and cons of various payment methods. Two popular payment options—credit cards and BNPL—could be worth considering.
While both methods offer a way to pay for purchases, they differ in several ways. For instance, BNPL is a one-time plan to pay for a purchase in fixed installment payments while credit cards offer consumers revolving credit, meaning the credit limit can be used and repaid over and over again.
Depending on your financial needs and goals, both payment methods could potentially contribute to mindful spending habits. Let’s take a closer look at which payment method might work for your needs.
Comparing credit cards and BNPL
Credit cards and BNPL each have distinct approval processes, credit impacts and structures for payment, interest and fees. Below, we’ve outlined some of the differences between these payment methods:
Credit cards
Credit cards allow you to borrow funds up to a predetermined credit limit to pay for goods and services. This payment method is widely accepted by many merchants. The application process usually involves a hard credit check, and card activity can affect the cardmember’s credit score.
Credit cards are a type of revolving credit, meaning that as you pay off your balance, your available credit is replenished. To avoid a late payment fee, you’ll need to make at least the minimum payment. However, paying the balance in full before the billing cycle ends is usually required to avoid paying interest charges.
Some credit cards offer a BNPL feature on eligible purchases, allowing cardmembers to split up the cost over a set timeframe through their credit card account. For example, Chase’s BNPL feature is Chase Pay Over Time®, which is offered with many of its credit cards, including Chase Freedom Rise®.
BNPL
BNPL is a type of short-term financing that allows consumers to split purchases over a set period in fixed monthly installments. BNPL is only available with participating merchants. While consumers often pay installments with a credit card, the payment process differs.
Unlike the revolving credit on a credit card, you cannot borrow again on the same BNPL plan once the purchase is paid off. Many BNPL plans involve few fees if the installments are paid on time, but long-term BNPL plans—those that extend over several months or years—might charge interest.
Pros and cons of credit cards
Pros
- You typically have flexibility with the monthly payment amount, paying anywhere from the minimum amount to the full balance.
- Some credit cards offer the option to pay for eligible purchases over a set period in fixed monthly installments, providing similar benefits to BNPL.
- Some credit cards offer perks and the opportunity to earn rewards.
- Credit cards are accepted by many stores and online retailers.
- When used wisely, credit cards can help build your credit score.
- Monthly credit card statements might help with financial planning and tracking your spending habits.
Cons
- Interest rates will likely apply if you carry a balance month to month.
- You could be charged a range of credit card fees, including annual fees, late payment fees and foreign transaction fees.
- You may find it more complicated to keep track of a credit card’s fee and interest structure.
- If you don’t use credit cards responsibly, there’s the risk of overspending, which could lead to more debt.
- Credit cards require a credit check, which may make them more difficult for some applicants to acquire.
- Missed payments and high balances could have a negative impact on your credit score.
- Unauthorized charges can occur if someone gets your credit card information, though you’re generally not liable for these charges.
Pros and cons of BNPL
Pros
- You could make a large purchase without paying the full amount upfront.
- Having a fixed monthly payment amount can help you manage your finances.
- Many plans have few additional fees as long as payments are made on time, potentially making this payment option more affordable.
- When a BNPL plan is an option, it’s usually integrated into the checkout process, allowing for a quick purchasing process.
- If interest applies, the full cost of the plan, including each payment amount, is often clearly outlined at the time of purchase.
- Some BNPL providers allow you to choose the number of installments or adjust payment due dates.
Cons
- BNPL usually doesn’t come with rewards or other perks.
- This payment method could result in short-term repayment burdens if you have multiple, overlapping plans, potentially disrupting your budget.
- A limited number of merchants accept this payment option.
- Not all BNPL programs report your activity to the credit bureaus as of September 2025, so on-time payments may not necessarily help build your credit score.
- Missed payments usually result in late fees, and in some cases, you could be charged interest, increasing the cost of your purchase.
- You may be required to set up automatic withdrawals, which could lead to overdrafts if your account balance is low.
When to use a credit card
A credit card could potentially be a wise choice when you want to:
- Build credit
- Earn rewards
- Pay in full by the due date to avoid interest charges
New to credit cards? Learn more about choosing your first credit card.
When to use BNPL
BNPL could be a good option when you want to:
- Avoid debt
- Don’t qualify for a credit card
- Have predictable payments
In summary
Credit cards and BNPL each have benefits and drawbacks. When used wisely, both payment methods can help support your financial health. Many credit cards offer rewards, a comparatively flexible payment structure, certain consumer protections and the ability to build your credit score. Plus, they’re widely accepted. However, you’ll need to be financially disciplined to avoid fees, interest charges and debt.
BNPL may be more accessible for some consumers. Due to clear payment plans, you may find this method supports predictable financial planning. However, this method is less widely accepted compared to credit cards.
