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In the fast-changing Global banking ecosystem, cash payments have decreased significantly over the last decade as other payment choices such as cards, e-wallets, and online banking have become the accepted norm. BNPL (buy now pay later) became a common credit option for customers at this time, offering them rapid access to an authorized credit limit that can then be used for expenditures.
But what exactly is this credit line, as well as what makes it so tempting to Gen Z and younger consumers? Let’s take a closer look at what’s involved.
Using the BNPL option to its full potential
BNPL (Buy Now Pay Later) allows you to make a transaction without thinking about current cash and then reimburse it at a later period, as the name suggests. Even though this is a small-ticket loan, it has grown in importance and popularity due to one essential factor: a simple and smooth consumer experience. The card less and cashless BNPL is effective, quick, and user-friendly for everything from shopping online to bill payment.
Aside from the flexibility and convenience that BNPL provides, this lending option could also help you create a favourable credit rating if you keep your half of the bargain with the merchant or lender and pay your bills on time. Here are 3 steps to assist you make responsible use of the BNPL option:
Keep a close eye on your BNPL activities
Yes, you can conduct many BNPL payments with separate lenders or merchants like lay away online but keep track of the total amount invested. You understand your financial situation, credit commitments, and other responsibilities, so be cautious and keep track of your BNPL activities. Even if you stay within your permitted credit limit, spending can make it harder to repay your debts responsibly.
Select your repayment period wisely
The repayment tenures and arrangements offered by BNPL are extremely flexible. Based on the tenure you select, there may be additional fees. If you choose an interest-free payback period, you will not be required to pay any of it. You may be fined late fees if you do not make your payments by the due date. If you’re certain you’ll be capable of paying off the entire balance as soon as your next pay check arrives. Whether you have made a large purchase, however, you may want to actually pay it off in instalments.
Make sure you don’t get behind on your payments
Because a missed repayment may result in a late charge and may have an influence on your credit rating, it is crucial to maintain budgetary discipline when completing your repayments, just as it is with other credit options. To understand the advantages of a loyal customer, make sure you pay your BNPL sums due by the agreed-upon deadline. You could also set calendar reminders and notifications to keep track of your due dates and make regular payments before interest accrues.
Convenience in Buy Now Pay Later Option:
The idea of using the Pay Later option is quite popular amongst customers nowadays. Most of them want to pay their bills with interest and do not like to wait for the due dates. Thus they go for this option. However, it has some disadvantages too.
They do not have any facility to check the outstanding balance before the payment date and also the process is quite complex. Therefore, if you are thinking about using this option for your transactions then you must be very careful. Before taking the help of this option, you must ensure whether it suits your needs or not.
The convenience of the Buy Now Pay Later option is that you can pay only what you can afford. This option is not available for all types of products. If you are willing to use this option then you should make sure that your bank offers this type of option to its customers. It is quite beneficial if you need a lot of time to repay the amount but you do not have the cash to pay on time.
There are many banks that provide you with Buy Now, Pay Later option. You must ensure that the interest is very less on your monthly instalments. You can find banks that offer you different types of interest rates according to your needs.
To summarize, while BNPL is a tempting idea for customers, it is critical not to get carried away with it. Keep credit and financial discipline to get the most of this credit choice.