What began for many as a way to pay for concert tickets and vacations is becoming an ordinary tool that Gen Z and millennial shoppers use for food, contact lenses and trash bags.
Not much difference, but it’s usually fairly predatory.
It’s not that it’s a fairly new thing- it’s that people are having to do it for necessities. Which just makes everything more expensive as your (probably) now on a credit treadmill.
BNPL generally has a fixed payment schedule, while CC does not. It’s entirely feasible to use a CC and never pay interest by paying debts immediately (because you have cash liquidity). At that point, a CC becomes more of a low-friction “accounts payable” system for consumers than a financing scheme.
BNPL’s primary value is in making large purchases because of low cash liquidity. When consumers don’t have enough cash liquidity for FOOD, that’s a sign of bad times.
I don’t know the difference between this and using a credit card? You can extend payment using a CC, are the interest rate that much lower?
Not much difference, but it’s usually fairly predatory.
It’s not that it’s a fairly new thing- it’s that people are having to do it for necessities. Which just makes everything more expensive as your (probably) now on a credit treadmill.
BNPL generally has a fixed payment schedule, while CC does not. It’s entirely feasible to use a CC and never pay interest by paying debts immediately (because you have cash liquidity). At that point, a CC becomes more of a low-friction “accounts payable” system for consumers than a financing scheme.
BNPL’s primary value is in making large purchases because of low cash liquidity. When consumers don’t have enough cash liquidity for FOOD, that’s a sign of bad times.