Buy Now, Pay Later (BNPL) is becoming increasingly ubiquitous, from check-outs at physical stores to e-commerce websites. If you’re a first-time user, you may even get an attractive discount. Users get to shop now, pay later.

BNPL solutions are similar to credit cards, giving you the option of paying later for a purchase you make now. However, BNPL allows more payment options.

You may prefer reimbursing the money over the month with one installment per week, OR you can repay the whole sum the following month. That being said, Buy Now, Pay Later makes it easy to fall into debt. Learn how to avoid debts here.

Thus, Buy Now, Pay Later is like a flexible short-term loan.

Should you choose a BNPL plan or a credit card? Read the guide below to find out.

How Does “Buy Now, Pay Later” Work?


BNPL isn’t a new invention. Furniture and appliance stores have used a similar proposition to tempt prospective buyers for decades.

Imagine stepping foot in such a shop – or even its online counterpart, now that many e-commerce stores leverage augmented reality. Your lower back is aching, and you’re eager to solve that annoying pain with a memory foam mattress.

You look around and test several options. Alas, the mattress you like is too expensive at $4,000.

The furniture store knows that, so it offers a more enticing option: you can pay $200/ month over 20 months for the same mattress. Basically, it gives you more liquidity.

Now imagine using your app to order dinner for your family from a restaurant.

The bill is $100, which makes you cringe. You immediately think of items to remove so that the tab can look more accessible. Maybe you can get your drinks for the local deli or prepare the salads yourself.

What if you were to see a $25 bill that you can repay over four installments instead?

The “Buy Now, Pay Later” method can turn something too expensive for you into something affordable. As a result, BNPL providers can increase basket size by 85%, a dream-come-true for any merchant. While shopping and clearing your wishlist seems fun, don’t forget to deposit money into endowment saving plans in Singapore for your financial health!

If you run into a financial emergency and do not have cash on hand, consider getting an urgent loan from Lending Bee! Lending Bee has a FinTech license, where we enhance our loan processes. Loan approval takes only 30 minutes.


Buy Now, Pay Later vs Credit Cards

Buy Now, Pay Later has a different audience than credit card issuers.

Getting a credit card is something you sign up for. People usually research different providers, comparing their conditions and offers because they want the best deals. Next, people will use these deals for some considerable expenses.

For example, you can use your credit card to pay for a renovation, a designer bag, or a romantic dinner at a lavish restaurant. But chances are you wouldn’t use your credit card to purchase fast food from your local deli.

The intentionality, rare occasion, and high(ish) price tag are specific features of a credit card or a loan.

By contrast, Buy Now Pay Later:

  • Lacks intentionality. You will find a BNPL at the cash register, and you’ll use it because you don’t want to leave part of your shopping there. So, you don’t have to research the best BNPL for hours.
  • Focuses on products you’re already buying. BNPLs are at your local supermarket, café, or restaurant. Thus, you can “splurge” on the things you’d buy anyway.
  • Is for affordable purchases. Providers focus on making cheap things cheaper so that you can fill your basket to the brim.

Another difference from credit cards is that BNPL solutions aren’t regulated in Singapore, although MAS is researching that. After more transparent legislation is set in place, Buy Now Pay Later providers may have to impose specific fees on customers. Consequently, people may not see the attraction any more.

But before that happens, BNPL allows you to make a purchase today and pay for it later with no interest. That brings us to the following point:


Buy Now Pay Later vs Credit Card Interest Rates

BNPL solutions offer purchases with 0% interest without any strings attached. Thus, if your supermarket bill is $100, that’s how much you’re going to pay.

Some credit card issuers offer 0% plans too.

There are some differences, though:

  • You’re only getting that offer once. Usually, banks allow a year with a 0% interest rate. The problem is that many people use credit cards for expensive purchases and the delayed interest tempts them into buying even more things. As such, many people roll out their balances until the 0% year passes, and they’re left with excessive debt.
  • You have to make a credit card. You can’t ask your bank for money on a whim after falling in love with a smart fridge or a massage chair. You have to go to the bank with enough paperwork to trigger a mild headache, including proof of income that’s usually around $20,000-$30,000 at most banks.
  • You won’t have the 0% offer forever. After a year or six months, your credit card’s interest rate climbs to about 25%/year. That means if you have any outstanding balance, you’ll have to repay it with accumulating

Besides, Buy Now Pay Later providers boast different repayment schemes. You can reimburse your payment after a month has passed, and this option is similar to having a credit card. Alternatively, you can repay the money within a tenure with specific instalments, which is more similar to getting a loan.

Is the Buy Now, Pay Later System Ethical? What’s the Alternative?


Buy Now, Pay Later addresses a specific audience of people who don’t purchase expensive things. Besides, these people are underserved by banks in Singapore, which impose strict conditions for income and citizenship status. Foreigners, students, and low-income people can benefit from Buy Now, Pay Later Systems.

But how ethical is it to target these categories?

The 0% interest that BNPL providers offer is highly tempting. If people continually overfill their shopping carts with cheap things, their debt accumulates each time they shop. That’s how they can find themselves swamped in debt. At this point, they might need debt consolidation loans to lessen interest rates.

Besides, BNPL users may not be financially savvy.

At the same time, it can be argued that everyone deserves equal chances to financial assistance and convenient support. It is unfair that only the wealthy are considered trustworthy customers and thus, given low-interest credit. By comparison, hard-working but low-income people are considered high-risk and receive small loans with high rates.

Lending Bee is different.

We can give you the financial help and customer support you deserve. With us, there won’t be shockingly high interest rates. Everything will be communicated clearly.

Read our customer reviews or apply for a loan here!


About Lending Bee

In a volatile, uncertain, complex and ambiguous world, you can count on one thing – your partner in credit, Lending Bee. Just like an industrious bee, we are committed to helping each and every customer access credit – quickly, easily and seamlessly.