EMI on Credit Card can be useful and convenient, however, there are circumstances in which it is advisable to use this feature. EMIs are useful when you want to buy something that your bank balance doesn’t support.
We all aspire to life. Whether it’s a dream vacation, taking an online course, buying the best DSLR camera or the latest iPhone, or buying a modern fridge or oven for our moms. In such cases, credit cards can be extremely beneficial, provided they are used wisely and judiciously. These cards provide greater convenience while making payments easier and eliminating the need to carry cash.
Plus, by converting your credit card transactions into easy Monthly Equalized Payments (EMIs), you can make a high-priced purchase without burning a hole in your pocket. Being able to buy expensive products on EMI is probably one of the biggest factors that attracts people to credit cards.
When to convert purchases to EMI
EMI on Credit Card can be useful and convenient, however, there are circumstances in which it is advisable to use this feature. EMIs are useful when you want to buy something that your bank balance doesn’t support. Plus, when you end up spending more on your credit card, IMEs can save you from high interest rates. In this case, getting the EMI option can cut your interest rate in half.
Plus, these options are available with the click of a button or via a call itself, there is no need for additional documentation or process to go through. Sometimes even your credit card statement can help you find this option.
Points to keep in mind when choosing the EMI option on credit cards.
Processing fee: EMI schemes are subject to nominal processing fees. Please check before you opt. Moreover, there are also many banks that have zero EMI offers that you can take advantage of.
Credit available: You need to make sure that you have enough credit on your card so that your EMI request is not rejected. The credit amount must be greater than or equal to the amount you want to convert to IME.
Temporary lowering of your credit limit: From the start of your EMI program, your bank will temporarily block an amount equal to the value of the purchase you made through the EMI option. However, when you start paying off your EMIs, your bank will start increasing your credit limit again by an amount equal to your monthly EMI.
by Mayank Markanday, Head of Credit Cards, AU Small Finance Bank.
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