Buy Now, Pay Later vs. Rewards Credit Cards: Which Should You Choose?
6 Min Read | Published: June 24, 2026
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Learn the difference between BNPL and rewards credit cards to maximize your spending. Compare the pros and cons to see which payment option fits your lifestyle.
At-A-Glance
- Buy now, pay later (BNPL) services offer predictable, short-term installment plans but typically lack the opportunity to earn points or miles.
- Rewards credit cards empower you to optimize your everyday spending, turning regular purchases into premium travel experiences and statement credits.
- Understanding the differences between BNPL and credit card options helps you maximize returns on your lifestyle investments and build a stronger financial profile.
Whether you’re booking an expensive flight or thinking about the best way to pay for your groceries, choosing the right payment method can be crucial for getting the most value from your spending. Alternative financing methods, such as buy now, pay later (BNPL) options, have become popular for people who want to spread out their payments, allowing them to make a partial upfront payment and pay the rest over time. However, using BNPL may not deliver the same benefits as a rewards credit card. So, which one should you choose?
The Difference Between BNPL and Rewards Credit Cards
BNPL programs allow you to pay for some goods over time, and you may see them as an option when you go to check out for online retail purchases. But BNPL doesn’t offer rewards like some credit cards do, which may offer the chance to cash in on more valuable benefits.
How Buy Now, Pay Later Works
When you choose BNPL at checkout, you often make a partial upfront payment and then spread the remaining cost over a set period in equal installments. BNPL plans typically don’t charge interest, which can make them an attractive option if you’re worried about owing more on your purchase over time.1 Plus, you generally don’t have to undergo a hard credit check to enroll in BNPL.2 That said, if you miss BNPL payments, you may end up paying interest charges or late fees, and your missed payments could get sent to collections if they’re too late.3
How Credit Card Rewards Work
When you make a purchase with a rewards credit card, you can earn different types of benefits with your purchases, like card member points, cash back, or airline miles. The rewards you earn per purchase may vary by card; for example, some credit cards may earn 3X points on qualifying restaurant purchases, 3X points on travel purchases, and 1X points on other purchases.
When you’re ready to redeem your rewards, you can cash them in for statement credits, travel experiences, flights, or other benefits available within your card member portal, depending on your card agreement. The value of rewards points and miles can vary based on how you redeem them and the type of card that you have.
However, you have to qualify for credit cards, and that involves a hard credit check, which can temporarily affect your credit score slightly.4 Additionally, if you don’t pay your balance in full at the end of each month, you’ll typically pay interest on top of what you owe.5 But, if you’re confident that you can repay your card on time and earn rewards, then you may prefer to use a credit card for your purchases and pay it back on your own terms.
Some credit cards even offer the option of installment plans, allowing you to split large purchases over a longer period of time while still earning rewards.
BNPL vs. Rewards: Pros and Cons
There are pros and cons to using BNPL and credit card purchases, and the one that works best for you may depend on your priorities, preferences, and circumstances.
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Advantages and Drawbacks of Buy Now, Pay Later
Here are some of the reasons why you may want to use BNPL:
- Breaking Up Large Expenses
If you have to make a sudden, significant purchase, BNPL plans can help you spread the costs out to better fit your budget. - Often Interest-Free
If you don’t miss payments, you typically don’t have to pay interest on your BNPL balance. - No Hard Inquiry
When you sign up for a BNPL plan, you don’t usually have to undergo a hard credit check, which can protect your credit score from temporary bumps. - Prescheduled Payments
Before you agree to a BNPL plan, you generally must agree to pay for your purchase in installments. The agreed-upon payment schedule may help you structure your budget better than if you made your own.
There are also downsides to BNPL, like:
- Potential for Fees and Interest
If you miss payments on your BNPL plan, you may have to pay fees, and you may even accrue interest on certain plans. - No Rewards
Unlike purchases made with a rewards credit card, you don’t typically earn rewards on your spending when you choose BNPL. - Can Complicate Your Budget
If you don’t carefully plan your payments and use BNPL for multiple purchases, it can be easy to spend beyond your means.
Advantages and Drawbacks of Credit Card Rewards
Like BNPL, credit card rewards come with pros and cons. Some of the perks of credit card rewards include:
- Range of Benefits
Depending on your card agreement, you could potentially redeem your rewards for cash back, valuable travel experiences, luxury flights, and more. - Repayment Flexibility
After you use your credit card for your transaction, you can pay it back over time as long as you make the minimum payment each month. If you pay your card balance in full each month, you may be able to avoid paying interest, too. - Purchase Protection
Many rewards credit cards offer insurance on your purchases if items are lost, damaged, or stolen within a certain time frame. If you’re curious about your card’s purchase protection policy, you can read the terms of your card agreement or reach out to the card issuer.
Credit card rewards have drawbacks too, like:
- Potential for Interest Charges and Fees
If you don’t pay your balance in full each month or break your card agreement, you could have interest and fees tacked onto your balance. - Hard Inquiries
Unlike BNPL plans, when you apply for a credit card, the card issuer uses a hard inquiry to view your credit history, which can temporarily hurt your credit score. - Overspending
Rewards credit cards may over-incentivize some people to spend more than they can afford, making it difficult to stay on top of payment due dates.
When Are Credit Card Rewards Better than BNPL Options?
If you already have a rewards credit card and feel comfortable managing your account to make on-time payments, using it to earn rewards may be a better option than opting for BNPL. In addition to your rewards, some types of credit cards can also insure your purchases, helping you feel more confident when you pay.
If you have a rewards travel card, for example, and you’re booking an expensive flight, you can earn more rewards on the costly purchase that you can put toward your next trip. And if your card includes travel insurance, you can feel better about receiving compensation if you encounter hiccups on your trip. Some rewards credit cards even have their BNPL options available as a part of their benefits, so you can still have that option if you have a card that offers it for some purchases.
Frequently Asked Questions
BNPL can help you spread the total cost of your transaction over time at qualifying merchants, but it won’t deliver rewards like a rewards credit card does. If you have a card that earns 3% cash back on grocery purchases, for example, you can expect rewards each time you stock up on food for the week.
BNPL plans typically don’t require hard credit inquiries, which temporarily lower your credit score. However, if you miss payments on your BNPL plan, certain credit score models may now reflect your missed payments, and if your outstanding balance gets sent to collections, your score may also take a hit.6 When you apply for a new credit card, the card issuer typically does a hard credit check, and if you miss payments, you can also lower your score.
The Takeaway
While BNPL plans can help you break up a payment and provide you with a firm repayment schedule, they generally won’t help you earn rewards. To make the most of your spending, rewards cards can help you earn cash back, points, or miles, depending on the type of card that you have. When you’re ready to redeem, you can get cash back, flights, and other valuable experiences.
If you want to start earning more rewards on your purchases, you can explore American Express rewards cards that can help you earn more on transactions that fit into your lifestyle.
1,2,3 “What Is Buy Now, Pay Later?,” Experian
4,5 “How Do Credit Cards Work?,” Experian
6 “‘Buy now, pay later’ purchases can now affect your credit score. Here’s what that means,” NPR
Scott Drueding Hanson is a content writer and copywriter based in Brooklyn. His work focuses primarily on personal finance.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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