Need money for festive shopping? Know pros and cons of using BNPL, Personal Loan & Credit Card

By: |
October 25, 2021 4:52 PM

People are thronging the market places – both online and offline – for festive buying, despite the fact that the Covid-19 pandemic has hit the earnings hard and the rate of inflation is high.

Covid-19 pandemic, festive shopping, Credit Cards, Buy Now Pay Later, BNPL, Personal Loans, low earnings, high inflationTo see the near and dear ones happy, many people may have to rely on credit to complete the festive buying.

As Covid-19 infections ebb, people are in no mood to let the festival season go uncelebrated like last year. People are thronging the market places – both online and offline – for festive buying, despite the fact that the Covid-19 pandemic has hit the earnings hard and the rate of inflation is high.

As a result, to see the near and dear ones happy, people may have to rely on credit to complete the festive buying. With many options available to postpone the payment, consumers need to know which one would suit them the most.

“After a challenging pandemic year, Indian consumers are gearing up for Dussehra, Diwali, and Christmas sales. With a plethora of financing options, choosing one can be difficult,” said Manikanta Racharla, Chief of Growth & Co-founder at Coine.ai.

Racharla lists the benefits of using Credit Cards, Buy Now Pay Later (BNPL) and Personal Loans to finance the festive buying as below:

Credit cards: Universal acceptance, interest-free credit periods of up to 45 days, ability to convert payable amounts into EMIs of up to 12 months. Most credit cards offer reward points and cash backs.

Buy Now Pay Later: Instant access to credit, interest-free period is mostly up to 15 days. Small ticket purchases from Rs 3,000 to Rs10,000 are ideal for BNPL.

Personal Loans: Choose if the credit requirement is high as personal loans have strict eligibility criteria, and approval takes 1-2 weeks. Interest rates are lower than credit cards.

Giving his verdict on the three options, Racharla said, “Credit cards are best if you already have one. Otherwise, you can choose BNPL. When purchasing on EMI, credit cards may offer a better rate than BNPL.”

Credit Line vs Credit Card vs Short-Term Loans: Why credit line scores over other options

Giving his opinion on the three options, Abhishek Soni ,CEO & Co-Founder of Upwards said, “When it comes to online shopping or white goods, BNPL or credit cards are better as they offer 0 per cent EMI loans. For needs which are more open ended in nature, like planning a family function or gathering, or renovating your house etc, a personal loan might be better as you will need to pay via cash for such expenses and personal loans are available in a complete online and affordable way now.”

Expressing his views, Anil Pinapala, CEO & Co-Founder of Vivifi India Finance, said, “Consumer behaviour and spending patterns have undergone significant changes over the years, especially in terms of how consumers transact. Buy Now Pay Later supplements the consumerism boom, with the aim of providing a digital credit card experience.”

“When shopping during the festive season, if your need is short term, you could use options like Buy Now Pay Later that FlexPay offers, or avail FlexSalary’s line of credit, which you can repay at your convenience,” he added.

“FlexPay with its credit on UPI, this festival season is offering customers ubiquitous reach to use the Buy Now Pay Later feature in all the stores across India, with ease. Additionally, it is also increasing the credit limits to customers for the festive season, thereby enhancing their purchasing power. Credit cards have a lot of offers in the festive season, so you could make use of the deals that work best for you, or go for a line of credit, which takes care of your immediate needs, without burdening you much,” Pinapala further said.

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