Credit

Buy Now Pay Later (BNPL) — India’s Growing Credit Trend What is BNPL? BNPL allows consumers to purchase goods and services with deferred payment—essentially short-term micro-loans. India’s BNPL market: $18+ billion GMV (2024), growing 50%+ annually. How BNPL Works Basic Flow Select BNPL at Checkout: Choose “Pay Later” option Instant Approval: AI-based credit assessment (seconds) Make Purchase: No upfront payment or partial payment Repay Later: Pay full amount by due date (15-90 days) Common Models No Cost EMI: Interest-free (merchant pays fee) Installments: 3-6 month EMIs with interest Pay Later: Single repayment after 15-45 days Key Players in India Digital NBFCs Simpl: Largest BNPL provider (acquired by Flipkart) ZestMoney: EMI-focused, 3-12 month tenures KrazyBee: Student-focused, campus placements Uni Cards: Card-based BNPL (now Postpe) E-commerce Integration Flipkart Pay Later: Platform-specific Amazon Pay Later: Amazon ecosystem Myntra ICICI: Brand-specific New Entrants (2024) Slice: Credit card alternative OneCard: Co-branded BNPL card Bajaj Finserv: Offline BNPL RBI Regulations on BNPL Classification as NBFC (2024) RBI Direction: BNPL players need NBFC registration Digital Lending Guidelines: Apply to BNPL Interest Rate Caps: Maximum 36% APR KYC Requirements: Mandatory verification Key Rules Credit Assessment: Can’t lend without proper due diligence Transparent Terms: All fees must be disclosed No Predatory Lending: Protect vulnerable borrowers Data Privacy: Explicit consent for data usage Costs & Fees Typical Charges Convenience Fee: ₹0-50 per transaction (no-cost EMI) Interest: 12-36% APR for installment plans Late Payment: ₹50-200 + interest on outstanding Processing Fee: 1-3% on some platforms Example Cost Comparison 1 2 3 4 ₹10,000 Purchase - 3 Month EMI - No Cost EMI: ₹3,333/month × 3 = ₹10,000 - 24% APR EMI: ₹3,514/month × 3 = ₹10,542 - Late Fee: +₹100-500 if missed Consumer Rights Before You Sign Up Read Terms: All fees, interest rates, tenure Check Credit Impact: Multiple inquiries affect CIBIL Understand Penalty: Late fees, interest accumulation Verify Registration: Must be RBI-registered NBFC During Usage Payment Reminders: Enable notifications Auto-Debit: Set up for timely payments Keep Proof: Transaction screenshots If Something Goes Wrong Grievance Redressal: NBFC’s customer service first RBI Ombudsman: For unresolved complaints Consumer Court: For unfair trade practices Risks & Red Flags Warning Signs Instant approval without credit check No disclosure of total interest cost Aggressive marketing to students/minors Hidden processing fees Refusing to provide transaction history Consumer Risks Debt Trap: Easy credit → overspending CIBIL Impact: Missed payments = lower score Legal Action: NBFCs can pursue recovery Harassment: Unregulated recovery agents Safe BNPL Practices Budget First: Only buy what you can afford Set Reminders: Calendar alerts for due dates Use Free EMI: Avoid interest where possible Check Statements: Review monthly transactions Limit Exposure: Use only 1-2 platforms Reporting Issues RBI Grievance: https://cms.rbi.org.in NCLT: For debt recovery disputes Consumer Court: For unfair practices Cyber Crime: For fraud Prime References RBI Digital Lending Guidelines RBI Consumer Grievances CIBIL - Check credit score This 101 guide is part of CashlessConsumer’s fintech education initiative. Last updated: March 2026. ...

Credit Cards — Understanding Plastic Money in India What is a Credit Card? A credit card is a revolving credit line that allows you to borrow up to a limit for purchases. India has 100+ million credit cards in circulation (2024), led by HDFC, SBI, and ICICI. How Credit Cards Work Billing Cycle Transaction Day: You make a purchase Statement Date: Monthly bill generated (usually same date each month) Payment Due Date: 20-25 days after statement (total due or minimum due) Interest: Charged on revolving balance Key Amounts Total Due: Full amount to avoid interest Minimum Due: 5% of balance (interest charged on rest) Available Credit: Limit minus outstanding Outstanding: All unpaid transactions + interest Interest-Free Period 1 2 3 4 Transaction: ₹10,000 on Jan 1 Statement: Jan 25 Due Date: Feb 15 Interest-Free Period: Jan 1 - Feb 15 (45 days) Types of Credit Cards By Category Lifetime Free (LTF): No annual fee (conditions apply) Premium: Annual fee ₹1,000-50,000+ (lounge access, rewards) Fuel: Cashback on fuel transactions Shopping: Discounts on e-commerce Travel: Air miles, hotel benefits By Issuer Banks: HDFC, SBI, ICICI, Axis, Kotak Co-Branded: Amazon-ICICI, Flipkart-SBI NBFCs: Bajaj Finserv, Capital Float Charges & Fees Common Fees (2024) Annual Fee: ₹0-50,000 (waived on spends) Interest Rate: 1.5-3.5% per month (18-42% APR) Late Payment: ₹100-1,200 based on outstanding Cash Advance: 2-3% of amount Foreign Transaction: 2-3% Reward Rates Premium Cards: 2-5% on specific categories Standard Cards: 0.5-1.5% on most spends Fuel Surcharge: 1-2% waiver RBI Regulations Key Rules (2024) Card Not Present (CNP): Additional authentication mandatory Tokenization: Card data can’t be stored by merchants Credit Limit: Cannot exceed 3x monthly income (guideline) Interest Rate Disclosure: Must show monthly and annual rates EMI Options: Must offer no-cost EMI conversion Security Requirements OTP for Every Transaction: No exceptions Hotlisting: Instant blocking facility Velocity Limits: Unusual activity alerts Managing Your Card Best Practices Pay Total Due: Avoid 18%+ interest Track Spends: Monitor via app Set Payment Reminders: Never miss due date Review Statements: Check for fraud Use Rewards: Maximize benefits without overspending Building Credit Score Payment History: 35% of CIBIL score Credit Utilization: Keep below 30% Credit Age: Older cards help Mix: Installments + revolving credit Common Problems Fraud Protection Liability: Zero for unauthorized (if reported) SMS Alerts: Enable for all transactions Virtual Card: Use for online shopping Disputes Billing Errors: Raise dispute within 60 days Merchant Refund: Can take 7-21 days Chargeback: For non-delivery, defective goods Consumer Rights Your Rights Transparent Pricing: All fees disclosed upfront Grievance Resolution: 30-day response timeline Interest Reversal: On failed transactions Card Recovery: Bank must reissue if lost What Banks Can’t Do Charge undisclosed fees Increase interest without notice Harass for recovery Block without reason Reporting Issues Bank Customer Service: First level RBI Ombudsman: https://cms.rbi.org.in Consumer Court: For deficiency in service CIBIL: Dispute on credit report Prime References RBI Credit Card Guidelines RBI Grievance Portal CIBIL - Free score check This 101 guide is part of CashlessConsumer’s fintech education initiative. Last updated: March 2026. ...