Credit Card, Loan, Buy Now Pay Later: What’s best for me?

Financial Health

Personal Finance

Team MONEYME|16 June 2021| 2-minute read

If you find yourself in a situation where you want to purchase something, but you are not able to pay the full price upfront, there are several options available: Apply for a credit card, take out a personal loan or use a buy now, pay later scheme.

With so much choice, how do you decide what is the best option for you? Here we’ll look at each one and discuss the advantages and disadvantages of each.

Buy now, pay later

‘Buy now pay later’ is becoming more and more popular as a way for consumers to make purchases when shopping either in-store or online. Several platforms on the market offer this service such as Afterpay and Zip. It allows you to get the product straightaway but spread the purchase cost over several regular instalments without paying any interest.

One advantage of using buy now pay later is that you can take home your purchase straight away without needing to make huge upfront payments, and can then pay it off in smaller instalments, and if you meet each of the payments, you generally won’t be charged any interest.

One of the disadvantages is that, unlike using a credit card, you are limited to only purchasing particular items. Although buy now pay later is available at a wide range of stores and across many products, it is not available everywhere.

MONEYME’s low rate Freestyle card, however, lets you buy now and pay later at any stores that accept Mastercard. Learn more about this product here.

Credit cards

With a credit card, you are given a spending limit. Having a line of credit is useful for paying bills, making small purchases and managing daily expenses. Paying most of your expenses via credit card makes it easy to track your spending.

The interest rates are generally higher on a credit card than with a personal loan, and you are required to pay a minimum monthly repayment. If you want to avoid paying interest altogether, you’ll need to pay off the debt in full each month. Credit cards usually have other fees that will differ between lenders such as annual fees, late fees, cash advance fees etc.

Personal loans

Getting a personal loan generally means you are borrowing a fixed amount of money that is provided upfront, and then you pay this back each month over a fixed period. Typically, the interest rates are lower on a personal loan than on a credit card. You may also need to pay an application fee and other fees, but this will vary depending on the bank or lender.

MONEYME offers cash loans of up to $50,000. With a simple online loans application process, you’ll receive your decision in a matter of minutes, and in many cases, the instant loans will be in your bank account on the same day.

MONEYME does charge an establishment fee that will vary depending on how much money you are borrowing and your credit history, but there are no early payment or early exit fees should you want to pay off the loan ahead of schedule. To determine your interest rate, MONEYME will take into account factors such as your credit score, income, living expenses and debt obligations. 

Buy now, pay later, credit cards and personal loans all come with different pros and cons, so you’ll need to choose the option that best suits your circumstances.

Whatever you choose, it is always best to get the most flexible and most suitable terms so you are always on top of your financial goals.