The credit card business model was supposed to help users increase capital efficiency while leading a financially responsible life. This has not been the case for the majority of the past decade or more. It is mainly because the credit card system fails to recognize the ever-changing consumer behavior, where users want more personalization and frictionless payment experience.
In addition, the lack of interest in credit cards is due to one of its long-standing consumer issues: high-interest rates or variable interest rates. It is "variable" because the credit card issuer can raise or lower your interest rate based on the prime rate, a reference percentage to calculate interest rates.
Your interest rates are also directly linked to your credit scores. So, if you make one late payment or have a high utilization ratio, your credit scores will fall through. As a result, it becomes extremely difficult to reclaim higher credit limits, considering the person have to bear with added interest rates.
It doesn't end with high-interest rates. The process of increasing credit limits is exhausting and confusing to the majority of the user demographic. On top of that, there is a high probability the credit card issuer rejects your request if you don't meet certain requirements such as credit score, income, and account ownership. On top of that, you need to make another request and wait for a few months.
The above is not always the ideal financial option for everyone, as with this centralized setup, you have a controlling entity determining your interest rates. You also can't always increase your credit limit seamlessly and run the risk of being charged late payment fees.
So how can you avoid all of this while still having high buying power and not paying any extra fees?
You can get ahead of the curve with BNPL using @Pay.
@Pay Introduces a Smart Credit System Formed Using DeFi & BNPL
Recognizing the growing preference for BNPL credit financing in the payments landscape, @Pay created a one-of-a-kind DeFi protocol that provides consumers with a capital-efficient credit system where users are not charged late payment fees.
The BNPL platform powered by the blockchain also prioritizes user experience. So, it has integrated a crypto-to-fiat model in its interface, which also adds more versatility.
Users can cover their shopping expenses using any approved cryptocurrency or fiat currency in four instalments. The added benefit here is an extended repayment period. Not many credit card issuers give three months to repay the extended credit. Furthermore, the @Pay protocol only charges $6 per month for account keeping and payment administration.
While incorporating BNPL formed a capital-efficient credit system, the functionality of DeFi and blockchain extend its functionality even further. @Pay uses a reward system to incentivize users and help them increase their spending limit.
The governance token of @Pay holds high value in the ecosystem. When a user makes required repayments and acquires a minimum of two tokens, they can upgrade their credit limit, giving them access to more capital. As the token fuels the @Pay ecosystem, it can also be used to propose higher purchasing limits or make other changes to the base protocol.
Compared to credit card systems, @Pay can facilitate users to increase their credit limit in a significantly less period. This is because @Pay offers a staking facility. In addition to the tokens earned through repayments, users can generate more governance tokens by staking stablecoins.
@Pay has listed ten stablecoins, including the most popular choices such as USDT, USDC, DAI, and BUSD. With the staking feature, users will get decent annual yields and accrue more number of governance tokens.
Leverage BNPL on @Pay for Stress-Free Financing
The conventional credit system is lagging miles behind the emerging BNPL sector in terms of end-user value creation. Late payment fees and high-interest rates will always be the entry barriers for users to have high buying power. But on a platform like @Pay, you can control the spending limit with zero added interest.