How is BNPL different from credit cards?

Like credit cards, BNPL plans allow you to spread out your payments for things you want to buy. One main difference between BNPL and credit cards is that you don’t need a credit history/specific credit score to be eligible for it. But, you’ll have to meet certain requirements (like age and employment status) before you can sign up for BNPL.

 

Here are some other differences between BNPL and credit cards:

 

  BNPL Credit cards
Who decides your credit limit?
  • You sign up for an account with a BNPL provider, who will decide your credit limit
  • You sign up for a credit card with a bank or credit card company, who will decide your credit limit
How much can you get?
  • Much lower credit limit than credit cards (Some start at RM500)
  • Higher credit limit (up to 2.5 times your monthly salary)
What is your limit based on?
  • Credit limit is based on your salary or your spending history
  • Credit limit based on your monthly salary
What is the repayment period?
  • Instalment period from 3 to 6 months
  • Payments can be spread over a year or longer, as long as you keep paying at least the minimum amount for your credit card
Where can you use it?
  • Currently can only be used on certain online shopping websites or apps and in certain stores
  • Can be used at all online shopping websites or apps
How long does it take to sign up?
  • Instant sign up process
  • Could take up to 2 weeks to get your application approved.
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