Buy Now Pay Later BNPL vs Credit Cards: A Simple Comparison for Kids & Beginners

Buy Now Pay Later BNPL vs Credit Cards: Easy Peasy Finance for Kids and Beginners

---

A BNPL vs Credit Cards Comparison for Kids and Teens

This video performs a comprehensive BNPL vs credit cards comparison in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about the differences between BNPL and credit cards, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.

Suitable for students from grade levels:

• Kindergarten
• Elementary School
• Middle School
• High School

The topics covered are:

• What is Buy Now Pay Later (BNPL)
• What is a Credit Card
• BNPL vs Credit Cards: How are buy now pay later and credit cards different
• BNPL vs Credit Cards: Which one is better for me

---

What is Buy Now Pay Later (BNPL)?

Buy now, pay later – or BNPL – is an increasingly popular way to make payments – especially for online purchases.

It is a type of short term financing, also known as a point of sale installment loan.

Instead of paying the full amount when the purchase is made, buy now, pay later allows consumers to split up the purchase amount into smaller – usually interest free – installments, paid over time.

This facility is offered by third party companies such as PayPal, Affirm, Klarna, Afterpay, etc.

What is a Credit Card?

Credit Card is a plastic or a metal card that is used to pay for goods and services at stores or online. They are issued by credit card companies, banks and credit unions.

Credit cards are a form of short term loan where you borrow money up to a certain limit, called the credit limit, from the card issuer and need to pay it back every month.

While credit cards are a very convenient form of payment, if the balance is not paid in full every month, they charge exorbitant interest, sometimes upward of 24%.

BNPL vs Credit Cards: How are buy now pay later and credit cards different?

You can get an approval for both BNPL and credit cards in a matter of seconds. But unlike most credit cards, you don’t need a good credit score to qualify for BNPL, making it a very convenient option for anyone with poor credit history.

While most credit card approval involves a hard credit check, BNPL involves only a soft credit check, preventing a hit on your credit score.

Credit cards are one of the costliest forms of personal loans, charging very high interest on any unpaid balance – and some even charge an annual fee.

BNPL installments are usually interest free up to a certain time, after which they charge late fees and interest.

Unlike buy now, pay later, credit cards help you build credit, offer rewards like miles or cash back and usually have built-in consumer protection if your purchase is defective or a scam.

In addition, returns are quite straightforward with credit cards but can be complicated for purchases made through buy now, pay later.

BNPL vs Credit Cards: Which one is better for me?

If you need to pay for an absolute necessity or an emergency, and can’t qualify for a credit card, you can choose BNPL.

Otherwise, as long as you are disciplined about paying the balance in full every month, credit cards are a much better option given the convenience, the rewards and the opportunity to build credit history.

BNPL vs Credit Cards: Your Experience

Do you use credit cards? Have you used buy now pay later?

What has your experience been? Do you prefer one over the other? Please let us know through your comments below!

---

Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens

---

Podcast: BNPL vs Credit Cards