There are no shortage of financing options these days. From credit cards, to payday loans, to buy now, pay later payment methods, the average consumer now has multiple choices on how to pay for their purchases. With so many choices available, it can be difficult to determine which method is best. Take credit cards vs buy now, pay later methods like Credova. Both are very solid choices that can offer point of sale financing online and in-store. Let’s break down some of the differences.
Predictable Payments
Because credit cards are revolving lines of credit, you can pile up multiple purchases a month on a single card. This can be really beneficial, but it can also mean incurring more and more debt. If your spending habits fluctuate month to month, so does your monthly payment. Your minimum monthly might go up or down depending on your spending habits. With alternative lenders like Credova, your payments are set. They don’t fluctuate, and you can budget your monthly expenses with your payment in mind.
Options
There are so many different credit cards out there. That’s great to have all those options, but often that would mean opening a new account each time you choose a new card option you like. With buy now, pay later options, some companies have multiple financing options you can get access to with one application. You don’t have to open multiple accounts, or even run single hard credit inquiry. Many options also come with 0% APR if you payback within a given window of time, something many credit card companies can’t offer customers.
Better Terms
Hands down, buy now, pay later payment methods offer better repayment terms. Terms are set so that you can successfully pay off your balance within a given amount of time. Credit cards are revolving lines of credit, and you can continue to carry a balance indefinitely which can negatively affect your credit depending on the amount you carry on your card.
Approval Amounts
Many credit cards don’t offer customers the amount they need for their vacations, new couches, whatever large purchases may come up. With many buy now, pay later payment methods like Credova, the approval amounts frequently are up to $5,000. In fact, Credova has one of the highest approval amount caps in the industry. Alternative lenders allow you the ability to buy what you need, when you need it and not have to wait until your credit card company decides to increase your spending limit.
All the benefits of using alternative lending are clear. It’s also important to keep in mind that you should use a mix of financial services to diversify types of credit utilization that appear on your credit report. Keep in mind to keep your credit card spending at a maximum of 30% of your limit to make sure you’re not negatively impacting your credit score.
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