Buy Now Pay Later (BNPL) platform Butter has launched the UK’s first physical credit card that allows shoppers to the spread the cost of purchases made online or in-store.
Research shows that 65 per cent of the UK population owns a credit card – the ninth highest level of credit card ownership worldwide. As a result, the average household is estimated to be in £2,085 worth of credit card debt, paying an annual rate of interest as high as £1,610.
However, it would seem credit cards are falling out of favour with consumers in the UK. The number of credit cards issued has fallen by -3 per cent in a single year while the value of goods purchase on credit has tumbled by -18 per cent on the previous year.
In contrast, the market for BNPL schemes has exploded in size with a 65 per cent increase in the last year. However, such payment services had been restricted to online shopping – until now.
“We wanted to create a physical product that transcended the current BNPL boundary between online and physical transactions, providing an additional option for consumers that allows them to buy on credit, without having to use a credit card,” explains Butter CEO Timothy Davis. “The ability to spread costs interest-free was just one of the motivations behind the Butter card. We also wanted to ensure that users kept full visibility and control, which is why the integration with our app was also of paramount importance. It allows our customers to choose how long they want to spread the cost for, easily manage their card and get full visibility on future payment dates. They can also repay early with absolutely no early repayment or hidden fees.”