How to make credit cards & BNPL work for you


Services that allow you to ‘buy now, pay later’ (BNPL) are becoming increasingly popular as data reflects that 30% of Australian adults (roughly 5.8 million national users) currently have one or more BNPL accounts. Many have had the internal debate whether to choose to apply for a credit card, or use credit services such as BNPL platforms. As everyone has a different income and varied lifestyle spending habits, there’s no right or wrong. We’re here to show you that you can make both credit cards and BNPL work for you.

One of the same

BNPL services have become increasingly popular, with many overlooking the fact that it is still a credit service, regardless of the fact that BNPL services are not required to hold a credit licence. They’re also not subject to consumer protections under the National Consumer Credit Protection Act 2009, even though some lend huge amounts up to $30,000.

An increasing number of people still find themselves in unaffordable debt via BNPL service use and although they don’t charge interest, the cost of late fees or account keeping fees can accumulate to credit card interest fees.

According to a 2020 report by the Australian Securities and Investment Commission (ASIC), one in five people had missed payments on their BNPL debts as well as one in five people had admittedly sacrificed essential items, such as food, to make their payment. Unlike credit cards, BNPL providers are not required to assess if a customer is able to afford the ongoing payments required to completely pay off their purchase. Customers don’t have to fill out any details on an application form, list any existing debts, prove their income or their ability to repay outstanding amounts. It’s left up to the BNPL service user to personally ensure that they will eradicate the debt over the weeks of their payment plan, and therefore not receive any late fees.

Whilst BNPL may give off the idea that it’s a safer bet than a credit card, the rules are one of the same: as long as you’re paying off your debt in the allocated timeframe, neither will have a negative financial impact.

Varied benefits

BNPL services simply assist purchasing items or services via a payment plan with no added interest, whereas credit cards can be tailored to specific buying needs and offer additional benefits. If you’re paid weekly, on a tailored budget that dictates your spending or prefer payment plans, then BNPL may be for you. Simply ensure that you make all your payments: made easy with the constant reminders by most BNPL services via text or email communication.

However, avid credit card advocates will tell you they were drawn in by the various, added perks offered by credit cards. This includes accumulated points and rewards that can be redeemed and building a positive credit history.

The variety of choice offered by credit cards is also enticing, depending on your buying habits and financial priorities. For example, if you’re a traveller and want a card that assists your overseas adventures, you could opt for a credit card that reduces international costs and offers insurance.

Whilst BNPL and credit cards are two credit options with varying differences, perks and cons, if you understand the mechanism and abide by the conditions, you can make both work to your highest advantage. Credit services aren’t to be feared, rather comprehended and then maximised. After all, services such as credit services are in place to help us, not work against us.



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