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Media to buy goods or transactions on credit or installments is now much easier.
In addition to using a credit card, you can also use the PayLater facility, which is usually found in digital applications such as digital money.
In fact, today the PayLater facility or app itself is widely available in digital travel apps as well as financial technology apps.
PayLater can also be an alternative for those of you who find it difficult to apply for a credit card. This is because this facility has a similar scheme to a credit card, i.e. ‘buy now, pay later’.
However, what makes it different from a credit card is that PayLater does not require physical ownership like a credit card.
Nowadays, the use of PayLater is also widely used by the public for transactions because of the various convenience features it has.
Well, since the PayLater facility has only come in the last few years, it is good to know about the credit difference using a credit card or using the paylater facility. Come on, take a look at the explanation below!
1. Credit card
The interest on the loan on PayLater and credit cards is different, although both have the same function, which is to carry out credit or installment payment transactions.
On credit cards, based on Bank Indonesia regulations, interest rates are set at 2.25-2.95%, with loan limits ranging from 3 million to hundreds of millions of rupiah, depending on the type of credit card.
For some types of credit cards, there is 0% interest on installments provided that the purchase is made at a merchant that cooperates with the credit card issuing bank.
0% interest applies from the beginning of the installment period until the end of the installment period. However, if the installment payment exceeds the payment period, the interest charged on the credit card will still apply.
In addition, the late payment fee on credit card bills is usually set at 3% of the total bill for the following month.
Other costs that will be borne by the credit card owner are cash withdrawal fees, currency conversion fees, over-limit fees, installment cancellation fees, check/money order refund fees, and bill copying fees.
(Also Read: For Those of You Who Are Extravagant, Tips for Saving Your Credit Card Use)
2. Pay later
Unlike credit cards, PayLater has a variety of interest rates. PayLater is also widely referred to as a virtual credit card.
Not without reason, considering that the purpose function is the same as that of a credit card, and the rates that PayLater users have to pay follow the same rules.
For more details, here are the interest, tenor and limit details of the digital apps that PayLater offers:
Yup Card is undoubtedly a new player in the world of PayLater. This app is really on the rise due to its fantastic product features.
Imagine, for new users, you deserve to get cashback up to 100 percent.
In addition, there are interest-free features for up to 40 days, no administration fees and annual fees, as well as a large credit limit, which is up to IDR 40 million.
Traveloka PayLater is a credit application that is the result of the collaboration between Traveloka and Bank BRI.
You can buy any item and pay for it at the end of the month with this PayLater app. The maximum loan limit is IDR 50 million, with interest starting at 2.14% per month and a term of up to 12 months.
Apart from Traveloka, a super app created by the nation’s children, GoPay has also brought the realm of PayLater to life to target the youth.
This alternative postpaid payment method can be used for various Gojek app transactions and transactions at GoPay merchants.
GoPay PayLater users themselves do not receive interest. However, you will be charged a transaction fee of IDR 25,000 per month.
SPayLater is Shopee’s PayLater product that offers a pretty high limit for its users which is up to IDR 50 million and a minimum interest of 2.95% per month.
Credit duration is long for a PayLater product class, up to 12 months, with various promotions offered, if you transact using SPayLater.
These promotions include free shipping vouchers, special price vouchers for new users and 0% installment promotions.
The next PayLater app that you may be familiar with is Kredivo. With the slogan #SeflexbelThat, Kredivo comes with various attractive offers.
Starting from the loan limit of up to IDR 30 million, 0% interest for a term of 30 days or 30 months, up to 2.6% interest per month for a term of 6 and 12 months.
You can use the Kredivo app at various online and offline merchants. Among them are Tiket.com, Bukalapak, Tokopedia, IKEA, at Alfamart.
Better with a profit credit card or Paylater?
Using PayLater or a credit card has its pros and cons.
The advantage of using credit through PayLater is that the application process is easy and the requirements are not complicated.
Simply upload a photo ID to the PayLater provider’s app you wish to apply for credit, and the PayLater credit facility can be activated and used for purchases.
However, the downside of PayLater is that the minimum total interest is quite high, and some apps offer a small limit.
Like Gopay which only offers a maximum loan of IDR 1 million and Shopee IDR 750 thousand. In fact, some offer up to tens of millions of rupiah, such as Traveloka and Kredivo.
However, the interest rate applied will also follow the total loan deposited. So, the higher the debt, the higher the interest charged.
Regarding credit cards, regardless of the credit application submitted, as long as it does not exceed the specified limit, the interest rate set will not change.
In addition, the advantage of having a credit card is that users will receive various attractive promotions, reward points, cashback and special discounts.
However, the credit card application process is not easy, the long process and many requirements make many people hesitate to apply for a credit card.
Requirements like minimum income, length of service, NPWP and bank screening process are just some of the various procedures that potential credit card users have to go through.
(Also Read: 5 Interest Free Credit Card Tips Make Profitable Deals!)
Comparison of service charges and fines
Most PayLater credit providers do not charge a service fee to their users.
However, there are also those that charge service fees like Ovo Paylater of 5% for every transaction made.
Meanwhile, credit cards have a service fee that users have to pay every year in various amounts with details including:
- Easy Card credit card: IDR 250 thousand
- Platinum Credit Card: IDR 600 thousand
- JCB Platinum Credit Card: IDR 300k
- Awesome credit card Indonesia: 600 thousand IDR
- World Access Credit Card: IDR 1 million
- Tap Free Credit Card, if you are activating another BRI card
- Free Business Card Credit Card
- Infinite Credit Card: IDR 2 million
CIMB Bank NIAGA
- Classic credit card: IDR 125 thousand
- Platinum Credit Card: IDR 600 thousand
- Credit card signature: IDR 900 thousand
- JCB Precious Credit Card: IDR 500k
- Skyz Card credit card: IDR 300 thousand
- Pertamina Card credit card: IDR 400 thousand
- Hypermart Card Credit Card: IDR 200 thousand
- Credit card Everyday card: IDR 125 thousand
- Indomaret credit card IDR 125 thousand
- Platinum Credit Card: IDR 250 thousand
- Matahari Mastercard credit card: IDR 125 thousand
- Mastercard Platinum credit card: IDR 450 thousand
- Visa Black credit card: IDR 450 thousand
- Visa Platinum credit card: IDR 450 thousand
- Batman Visa credit card: IDR 125 thousand
- BCA Singapore Airlines PPS Club Visa Infinite Credit Card: IDR 1 million
- BCA Singapore Airlines KrisFlyer Visa Signature Credit Card: IDR 500k
For late payment penalties on credit cards of 3% of the total invoice.
Meanwhile, late payment penalties on PayLater vary depending on the PayLater service provider you use.
Choose the one that suits your needs
Credit cards and PayLater have their pros and cons as described above.
Therefore, you can choose to make credit transactions using a credit card, or use PayLater services depending on your needs.
Carefully consider which PayLater service you want to use based on the amount of interest and service charges applied by the PayLater provider.
In the meantime, if you want to use a credit card as a transaction tool, make sure you know the consequences and the fees charged.
However, if you do not have a credit card, you can apply for one through a bank, taking into account your income, which will determine the amount of the limit that will be granted.
In addition, look for credit cards that have a lot of collaboration with merchants and can offer various attractive promotions, such as cashback promotions or discounts.
Thus, the transactions you make using a credit card are automatically much more efficient and profitable.
Do not use PayLater with your credit card
If you already have a credit card, it is better not to use the PayLater service because it will be burdensome when you pay the bill later.
You must ensure that your financial capacity is able to pay the installments plus interest on PayLater and pay the bills that come from your credit cards.
For credit card users, using PayLater will create an additional debt burden that can swell without realizing it.
Indeed, in practice, the use of PayLater is considered as an alternative financing when the salary has not been paid, while the credit card limit has been exhausted.
Under such conditions, you should put the brakes on spending, not by adding new debts.
Similarly, if you are already registered as a PayLater user in one of the mobile applications. So, you should not enable the PayLater feature in other apps.
Because without clear real-time records, you’ll be surprised when you get your monthly bill later.
Be wise when deciding which loan repayment tool best suits your financial needs and capabilities.
So, it does not become a financial burden in the future. So, have you made your choice? Want to use a credit card or PayLater?