One of the most popular forms of payment everywhere in the globe is credit cards. Although a sizable portion of transactions is now made digitally, credit cards remain dominant. Credit cards are practical payment methods that enable you to make purchases on credit and have the capability to make repayments at a later time. An EMI option with a credit card is available for certain transactions or the complete amount owed. Credit cards give you the option of EMI payments when it comes to paying off credit card bills. You receive a line of credit; as a result, allowing you to make large purchases or support you in times of need.
Your month’s cash flow is eased by using credit cards. They enable you to deal with any unanticipated situations that might happen over the course of a month. Also, they provide numerous incentives and savings for using them. If you have complete control over your spending patterns, they can be a very effective financial tool.
- What is a credit card EMI?
It’s thought of as a bank loan when a credit card bill is presented. You receive a loan from the bank for the full amount of your credit card bill, which you can repay in installments as necessary. So, it is critical for the banks to make sure that you will repay the money when due and won’t misuse the loan they have provided you before they lend it to you. Before approving your application to have your credit card payments converted into EMIs, banks perform a number of checks, including your credit score, credit repayment history, current loans, etc.
A tool known as credit card EMI helps cardholders to pay off their outstanding obligations in more manageable, reasonable installments. There are two situations when you can use the credit card EMI facility:
For one large transaction
Many credit cards give you the option to divide a large purchase into manageable EMIs if you use the card to make an expensive purchase or another kind of significant transaction. Spreading the expense over the subsequent few bills will allow you to avoid paying for the transaction in one lump sum. By doing this, you may easily pay off the expensive purchase.
For the entire balance on your unpaid credit card bill
Also, you may be able to convert your credit card bill’s balance into manageable EMIs with some credit cards. Thus, this facility allows you to convert the entire credit card bill into installments rather than just a specific purchase, which is what EMIs are used for.
- Advantages of EMIs on credit cards
For cardholders, credit card EMIs have a number of advantages. They consist of the following:
- Highly convenient
Making use of the EMI feature is quite easy and practical. You can activate the service by simply notifying the credit card company.
- Enhances Credit Profile
As EMI payments remove the need for a sizable payment towards the credit card debt, there are fewer odds of a borrower missing payments. As a result, over time, using this repayment option assists people in progressively building their credit histories.
- Attractive Interest Rates
Banks and lending organizations that offer the option of turning purchases into EMIs typically offer interest rates that are very reasonable. The interest rate on purchases that have been converted to EMIs is typically low because, as we all know, all EMI payments do carry a certain rate of interest. In some cases, the bank may decide not to charge any interest at all on your purchase EMI.
- Pre-approved facility
The credit card company has given the pre-approval for the EMI facility. You do not need to go through a drawn-out process or get permission in advance! To choose the facility, all it takes is a simple request.
- Minimum to no paperwork is required
There is little to no paperwork required for items that are paid for with EMIs, making it more convenient for you to make large purchases without worrying about submitting a lot of paperwork.
Although it is simple to convert your credit card bills into EMIs, it is vital to take into account all of the different elements that greatly influence this process. The most crucial point to remember is that not all credit card issuers offer the option of EMI repayments, and not all cardholders would be qualified for it. If you do decide to use your credit card for an EMI purchase, make sure you only borrow the money for a short time. The maximum amount you can afford to charge to your credit card can be determined with the aid of a credit card EMI calculator.