David Boyd
What is a buy now, pay later style credit card?
It is an ordinary credit card that charges a flat monthly fee in place of interest. You get a revolving credit limit like any other card, but instead of interest accruing on what you owe, you pay the same set fee each month. The buy now, pay later comparison is about how the cost is structured, not about the product itself: these are credit cards, regulated as credit cards.
Because the fee is fixed, the cost is predictable. It also means you pay it every month you hold the card, even in a month you carry no balance.
How the monthly fee compares to interest
On a card that charges interest, the cost rises and falls with your balance and drops to nothing in a month you pay in full within the interest-free days. A flat monthly fee does neither: it is the same every month, so it can work out cheaper on a large balance and dearer on a small one.
To weigh it up, multiply the monthly fee by 12 for the yearly cost, then compare that against the interest you would expect to pay on a card with interest-free days. See low rate credit cards and no annual fee credit cards for cards that charge interest instead.
What to check before applying
The monthly fee: this is the main cost, so note the figure and the yearly total.
Whether the fee applies in every month or only in months you use the card: the terms state this, and it changes the real cost.
The credit limit and minimum repayment: you still need to meet the minimum each month.