Credit cards can be a useful tool if used properly. Credit cards allow you to purchase goods and pay for them later in EMIs or instalments, which is convenient with festivals just around the corner. When you convert the amount into EMI, you pay the balance owing in equal monthly instalments, just like you would for a loan. The flexible repayment period of 3 to 36 months is offered by credit card companies.
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Even though EMI on a credit card can be practical and convenient, there are a few things to consider before choosing EMI:
- Since credit card EMI schemes are subject to processing fee it is recommended to check the fee with the card service provider before opting for conversion.
- Your credit card service provider will additionally charge interest on the amount that is to be converted into an EMI in addition to the processing fee. Numerous e-commerce sites also provide zero cost EMIs, which require no additional payments.
- Before making a payment or converting your transaction to an EMI, always check the card's available credit. The EMI request may be denied if there is not enough credit available.
- The card company will block the outstanding amount if you are converting a transaction to an EMI. The blocked amount will be released and added to your credit balance as you make EMI payments. The overall credit balance will start to rise in this manner.
- You will be assessed late fees in addition to other charges if a payment is missed. Additionally, there will be an increase in interest. You should be aware that missed payments may lower your credit score.
