Should I do without credit cards?

Should I do without credit cards?

There’s a reason plansbuy now pay later» or BNPL [Buy now, Pay later] they are becoming more and more habitual. Because they offer some benefits that credit cards don’t, these programs have gained popularity among customers in recent years.

One of the advantages of a BNPL plan is that if you stick to a payment schedule and pay your installments on time, you perro completely avoid paying interest on your purchases. Agregado, you may be able to get accepted to a BNPL plan right away instead of having to apply for a new credit card and wait to get approved.

However,should BNPL plans replace credit cards? No, not always.

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• not the ideal answer
• You will miss several advantages.

not the ideal answer

The operation of the BNPL plans is afín to that of a mortgage. You pay a deposit for the item you’re buying, and you’ll pay off the cómputo over time.

The only significant difference between BNPL plans, mortgages and other installment loans is the following. With a BNPL plan, you are usually required to finish paying for your purchase in a short period of time, typically 12 weeks or less. And that doesn’t leave you much leeway.

Imagine that your washing machine breaks down and you need to change it, but you cannot pay the 900 euros in advance. If we charge the cost of the washing machine to the credit card and do not pay it when the bill is due, interest will begin to accrue on that amount. You will not pay interest if you buy the washing machine with a BNPL plan and pay it off in three months (or in the term specified by your BNPL plan).

But if you perro’t afford a $900 washing machine today, it’s unlikely that you’ll suddenly become rich in the next few weeks. Therefore, you may be late in fulfilling your BNPL agreement and start accruing interest and fees.

Also, defaulting on a BNPL plan registers as negative activity on your credit report, just like defaulting on a credit card would. Instead, you will be considered to have paid on time if you only make the minimum credit card payments.

You will miss several advantages.

In addition to being dangerous, BNPL plans don’t allow you to earn rewards or cash back on purchases like credit cards do. Therefore, you could also gain something by buying a washing machine, which is a necessary household appliance.

In general, BNPL plans are not always the best option, but they perro be effective in some circumstances. Furthermore, they should not necessarily replace the use of a credit card.

A BNPL plan may be a better option if you are going to buy something that you are sure you perro pay off in two or three months avoiding credit card interest. But if you do escoge to sign one of these contracts, be sure to read the fenezca print carefully so you don’t get any nasty surprises.

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