Understanding the BNPL Allure
The festive season in India brings a wave of irresistible sales, and Buy Now, Pay Later (BNPL) has become a popular payment option at checkout. Services like Simpl, Lazypay, and others offered through platforms like Amazon and Flipkart allow you to purchase
items immediately and pay for them later, often in interest-free instalments over a short period. The appeal is obvious: it makes expensive purchases feel more manageable and provides instant gratification without an immediate hit to your bank account. The process is seamless, requiring minimal documentation and offering approval within minutes, making it incredibly tempting during a high-spend season.
The Hidden Risks of 'Pay Later'
Despite the convenience, BNPL is a form of credit, and it comes with significant risks. The biggest danger is the ease with which it encourages impulsive buying and overspending. Because the full cost is deferred, it's easy to accumulate debt across multiple platforms, making it difficult to track repayment schedules. Missing a payment can lead to hefty late fees, and some lenders charge interest rates as high as 30-40% annually on overdue amounts. Furthermore, most BNPL transactions are now reported to credit bureaus like CIBIL. This means missed or delayed payments can negatively impact your credit score, affecting your ability to secure loans for major life goals in the future.
Rule #1: Create a Festive Shopping Budget
Before you even start browsing the deals, the most crucial step is to set a clear, non-negotiable budget. Look at your finances and decide on a total amount you can comfortably afford to spend this festive season. Break this budget down into categories like gifts, clothing, home decor, and electronics. Having a pre-defined limit acts as a powerful guardrail against impulse purchases driven by flashy discounts. Treat your budget as a firm boundary, not a target to be reached. This simple exercise can prevent post-festive financial stress.
Differentiate Wants From Needs
Festive sales are designed to create a sense of urgency and trigger emotional purchases. Before adding an item to your cart, take a moment to ask if it's a genuine need or a fleeting want. A helpful trick is to add items to your wishlist and wait 24 hours before making the final decision; this cooling-off period often helps filter out impulsive buys. Prioritise essential purchases you have already planned for, and if a luxury item doesn't fit within your pre-set budget, be disciplined enough to let it go. True festive joy doesn't come from a purchase you'll regret paying for later.
Using BNPL Responsibly (If You Must)
If you decide to use BNPL, it must be done with strict rules. Treat it as a short-term loan, not free money. First, use it only for planned purchases that already fit within your festive budget. Second, limit your use to one or two BNPL providers at most to simplify tracking. Third, set reminders for every due date and aim to pay them off early to avoid penalties. A smart approach is to ensure your total monthly EMI payments, including BNPL, do not exceed 30-40% of your income. Never use BNPL for everyday expenses like groceries or food delivery, as this can quickly spiral into a debt cycle.
Explore Smarter Payment Alternatives
BNPL is not your only option. The most straightforward way to shop is by using your savings or a debit card, as this ensures you never spend more than you have. If you are disciplined, a traditional credit card can also be a better alternative, especially if it offers rewards, cashback, and the protection of Section 75 for larger purchases. The key is to pay the balance in full before the due date to avoid high interest charges. Some banks also offer attractive no-cost EMI options on credit cards during sales, which can be a more structured alternative to the often fragmented nature of BNPL services.
