There is no doubt that shopping is naturally an interesting and fascinating experience. It is assumed that you are an avid shopper and feel happy when you shop for the accessories or services, which you desired. As interesting as it seems, limited financial capacity can pose a challenge. To sort this financial need, Credit Card EMIs have been introduced by Credit Card companies to enable shoppers to purchase their goods on credit and clear the bills in the nearest future. As a shopaholic, you get to enjoy your shopping and repay within a period of time. However, it is important for you to have a sufficient understanding of how the EMI scheme works on Credit Cards so as to be properly guided.
- EMI schemes, in most cases, work with a tie-up with a merchant.
- Before you can use the EMI on your Credit Card, there is a minimum level of purchase that must be made, as per the rules of the bank.
- Using a Credit Card EMI affords a shopper with the opportunity to pay for purchases at his convenience without much brunt.
- After shopping, a user gets a 44-45 day interest free period for repayment depending on the bank. At the elapse of these 45 days, the bank begins to add the interest rate to the total bill of the user.
- Payments can be made in installments within 3 months-24 months with a time interval of 3 months. Some banks even extend to 36 months. So, you can conveniently choose a payment plan that suits your budget.
- To be on the safer side, endeavor to choose lower tenure so as to ease the repayment of the loan.
- You should also note that interest rates differ with banks. So, you need to look out for the cheapest rate for easy repayment.
- Not only should you consider the interest rate, but you should also consider the processing fee. Although the processing fee differs depending upon the bank; it is pegged at 0.5%-1% of the total amount of purchase. This processing fee is charged upfront by banks in order to activate the EMI option on Credit Cards.
- There is also the prepayment penalty charged on clearing your EMI loan. It is usually 2% or 3% of the outstanding balance depending on your type of card.
- However, not all cards charge pre-closure penalty. You, therefore, need to read and understand the terms and conditions on your card.
- Most of the Credit Card companies two types of EMI scheme. One has a free zero interest rate while the other has a low-interest rate.
- This other interest rate is regarded as low because it is lower than the late payment interest rate paid on a non-EMI option. With this, these companies entice customers to delay payments further at a low-interest rate.
- In order to get cash discounts on your purchases using your Credit Card EMI during this festive season, you should not hesitate to ask from the retailer. This is because discounts are offered more on cash and Credit Card purchases. But you might just get lucky by asking.
- There are amazing benefits on Credit Card EMIs especially during festive periods such as this. Most times, processing fees are not charged. Look out for these benefits and maximize the opportunities.
- When using an EMI option, you should avoid defaulting in the repayment of your bills. Clear your bills within the chosen time span in order to have an impressive credit score. Failure to pay off EMI will negatively affect your credit score. You definitely don’t want such for yourself.
As much as EMIs on Credit Cards are beneficial, it can be crazy and overbearing if care is not taken. You need to consider the following points to be sure you really want to enable the option on your Credit Card.
Upon converting to EMI, many banks request the payment of a bloated minimum amount each month. Instead of convenience and ease, a customer is loaded with a ridiculously high amount to pay every month.
Also, when the EMI option is activated on your Credit Card, your Credit Card limit is reduced by the amount of principal outstanding. As expected, your debt reduces as you pay the EMI. But while the repayment is on, it is difficult for you to shop up to the set Credit Card limit.
With Credit Card EMIs, you may not be able to purchase goods from certain merchants. This is because such merchants are not qualified for the EMI scheme. You may not always get to use the EMI service all through the year as it might not be available at certain periods. Best Credit Card EMIs are not really what they appear to be to customers. The scheme lures shoppers to pay in future with interest by offering temporary respite for the buyer who may be experiencing a financial challenge at that point in time.
Having established all these, it is left to you to employ your discretion in using the EMI scheme on your Best Credit Cards in India. The EMI scheme is no different; it has its share of advantages and disadvantages. This is why you should weigh the options and make a choice from the rate of your needs and wants. A Credit Card EMI scheme is more favorable when you make large purchases worth more than you can pay for at the moment. With this scheme, you get to purchase the expensive product and gradually pay up the bill within a convenient timeframe. It could be a lifesaver, but when you can afford to make a cash payment, do so in order to save yourself the stress. Bear at the back of your mind that these Credit Card companies earn more interests from the late payments.
It is true that as a shopper, you love to go on shopping sprees. However, your sense of discernment should not be clouded by the feeling of excitement. Be rational enough to purchase what you need most at the right time.