Choosing Between BNPL and Credit Cards

After the pandemic, the financial behavior of South Africans went through significant changes.

High inflation, rising living costs, and increased interest rates fueled the growth of new payment solutions.

Among them, BNPL (Buy Now, Pay Later) has become an attractive alternative for consumers seeking flexibility without relying on traditional credit.

At the same time, credit cards remain a well-established and widely used financial tool in the country.

But the key question is: which option works best for South African consumers in 2025?

How BNPL Became Popular in South Africa

BNPL expanded quickly because it filled a gap many South Africans were looking for: interest-free installments, no credit card required, and minimal bureaucracy.

Platforms like PayJustNow, Happy Pay, MoreTyme, and Float simplified the shopping process by dividing payments into fixed installments—usually three or four—without additional cost.

The main factors driving BNPL adoption include easier access, a fully digital process, predictable costs, and alignment with consumer behavior.

However, growing popularity also brought challenges, such as impulsive spending and the accumulation of multiple overlapping installment plans across different platforms.

How Credit Cards Evolved to Compete with BNPL

While BNPL was gaining traction, banks and card issuers in South Africa — such as FNB, Standard Bank, Capitec, Nedbank, and Absa — adapted their products.

Today, credit cards offer cashback or points-based rewards, fraud protection, travel and purchase insurance, installment options with reduced interest, and loyalty programs.

Even so, revolving interest rates can exceed 20% per year, making delinquency a significant risk for consumers who fail to manage their balance.

Still, credit cards remain a powerful tool for users seeking advanced flexibility and the ability to build long-term credit history.

Comparing BNPL and Credit Cards for South Africans

Ease of Approval

• BNPL: fast approval, light assessment, ideal for low credit scores or limited history.
• Credit cards: require income verification and risk analysis. Over-indebted consumers may struggle to qualify.

Costs and Interest

• BNPL: usually interest-free as long as payments are on time; late fees may apply.
• Credit cards: purchases paid in full can be advantageous, but carrying a balance becomes expensive quickly.

Extra Benefits

• BNPL: virtually no benefits beyond installment flexibility.
• Credit cards: rewards, cashback, travel insurance, purchase protection, partner promotions.

Budget Management

• BNPL: easy to control because each purchase becomes a fixed installment plan.
• Credit cards: require discipline to avoid accumulating debt and to pay the statement in full.

Credit History Building

• BNPL: in South Africa, most platforms do not contribute to credit score—except in cases of missed payments.
• Credit cards: directly help build credit history if paid on time.

Risk Profile

• BNPL: ideal for small and medium purchases with limited risk.
• Credit cards: support larger transactions, travel, emergencies, and recurring payments.

Which Works Best for Each Type of South African Consumer?

Young adults and students

Best option: BNPL
Reason: easy approval, no interest, suitable for moderate purchases.

Organized professionals seeking benefits

Best option: Credit card
Reason: rewards and insurance offer excellent value when the statement is paid in full.

Consumers facing inflation and tight budgets

Best option: BNPL
Reason: predictability and lower risk of high-interest debt.

Travelers, expatriates, and remote workers

Best option: Credit card
Reason: travel insurance, global acceptance, and fraud protection.

People looking to build credit history

Best option: Credit card

Consumers prone to impulsive spending

Best option: BNPL
Reason: natural spending limits and fixed installments support better control.

Conclusion: BNPL or Credit Card? It Depends on the Goal

In South Africa’s current financial landscape, there is no universal answer.

• BNPL works best for those who want simplicity, control, and zero interest.
• Credit cards work best for those seeking benefits, security, and long-term credit building.

For most consumers, the ideal approach is to use both strategically: BNPL for specific, planned purchases, and credit cards for larger expenses, emergencies, and rewards.

The best approach is to plan ahead and always choose the option that maintains your financial safety, avoiding problems and preventing debt.