For people who are in a tight financial situation, credit cards have emerged as a practical form of payment. When you don't have enough cash on hand, credit cards make it easier to make purchases and other payments. Your spending power is also increased by using credit cards, as you typically have 30 days to pay off your balance. Unfortunately, many credit card users frequently forget to pay their credit card payments by the deadline. Due to this, the total amount owed increases in the interest rate and late payment fines.
Thus, experts advise paying off all of your credit card debt in one go before the due date because most credit cards have interest rates that can reach up to 36% annually. On the other hand, if you are unable to pay off the full balance of your credit card statement in one go, you have the option of breaking up larger purchases into equated monthly instalments (EMIs).
How does EMI on credit card work?
Credit card EMI operates in a straightforward manner. When buying anything costing more than Rs. 10,000, such as electrical appliances, furniture, vehicles, etc. You may turn it into an EMI.
The bank's interest rate, the duration you select, and the down payment you make will all be taken into account when calculating the EMI.
If, for instance, you spend Rs. 10,000 as a down payment on a phone that costs Rs. 20,000. The remaining Rs. 10,000 can be paid in one-year instalments at a 12% interest rate. You would be required to pay Rs. 1,200 in EMI over the course of a year.
Key things to keep in mind:
- Not every credit card offers an EMI option.
- Your card's limit is decreased by EMI purchases.
- Your card's limit is decreased by EMI purchases.
- Choose online purchases
- You may be eligible for a prepayment penalty waiver.
- Make all of your payments on time.
