NEW DELHI: Credit card customers typically discover themselves unable to repay their payments earlier than the due date. In such instances, bank card issuers generally enable customers to transform their whole invoice or part of it into equated month-to-month instalments (EMIs) at a decrease curiosity value and for a snug tenure.
This facility can be availed by these with out rapid compensation capability for making giant bank card spends. While the EMI conversion facility could appear a win-win proposition for each card customers and their issuers, bank card holders ought to think about these 4 components to make an optimum selection:
Conversion of excellent bank card invoice or a part of it
This possibility permits bank card customers to transform their whole bank card invoice or part of it into EMIs. Sahil Arora, senior director, Paisabazaar.com stated, “This will save them from incurring hefty finance charges, as well as, late payment fee levied on unpaid credit bills. They can repay the unpayable portion of credit card bill in smaller tranches through EMIs as per their repayment capacity.”
Conversion of choose transactions
This possibility permits card customers to transform transactions past a pre-specified threshold quantity set by the cardboard issuers into EMIs. Exercising this feature could be useful for many who want to convert solely particular card transaction(s), particularly the big-ticket ones, into EMIs.
Credit card stability switch on EMI
Many bank card issuers provide the power of EMI conversion on bank card stability switch. This possibility means that you can switch the excellent credit score stability of a bank card to a different bank card issued by a distinct card issuer after which convert the transferred stability into EMIs.
“This balance transfer facility can be helpful for card users whose existing card issuer(s) either refuse the EMI conversion facility or charge a higher interest rate for the same,” stated Arora.
Points to notice
The rate of interest levied on bank card EMI conversions are considerably decrease than hefty finance expenses of round 23%-49% p.a. levied on excellent bank card dues. However, the rate of interest charged for EMI conversions tends to range broadly relying on the bank card and the cardboard holder’s credit score profile, previous compensation behaviour, and transaction sample.
Arora stated, “If you have multiple credit cards and you plan to make some credit card transactions that would be later converted into EMIs, make sure you compare the interest rate levied on EMI conversions by existing card issuers and accordingly make transactions. Keep in mind that credit card issuers may also levy processing fees for the EMI conversions.”
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