EMI Schemes on Credit Cards – How Does it Work?
Credit card EMI has become increasingly popular with more and more individuals taking the opportunity to purchase their electronic products, home appliances, and furniture items through it.
We can return our credit card due amount in three ways. The first one is paying the entire amount before the due date where no interest is charged. The second is paying some portion of the due amount and carrying the rest of the amount for a longer period with some interest. And the third is returning the amount with EMIs.
How Does Credit Card EMI Scheme Work?
Unlike a typical EMI card, it works differently. There is no denying that a credit card is a great tool to have. But you’ll have to remind yourself from time to time that you need to spend your money wisely. With a credit card, it’s easy to get tempted and spend more money, which can lead you to debt. But a credit card EM scheme can help manage this dept as it allows you to convert your debt into EMIs.
With the help of this feature, you can set a credit card EMI limit. However, you need to make sure that the limit you have chosen is within your reach so that it does not end up disrupting your financial stability.
But, there are some factors you should consider before you choose the EMI options on credit cards.
When you opt for the EMI schemes, it’s important to keep enough credits in your card. Ideally, you should consider keeping more than or at least an equal amount that you would like to convert into EMIs. If not, your application for applying EMIs will be rejected.
EMI plans come with an interest charge and may need to be paid upfront. The processing fee will usually vary depending on the amount you wish to convert into EMIs. It is your responsibility as a borrower to check with the lender for more information on their terms for processing free and any offers announced.
When the EMI feature is offered with your purchase, the lender will temporarily freeze a value equivalent to the whole of your purchase price and this will go towards clearing off your debt. As you start making payments according to the allotted EMI for that month, your credit limit will be increased by an amount of money that is equivalent to what you have paid towards your EMI.
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