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Advantages of converting credit card purchases into EMIs

By choosing the EMI payment facility, a cardholder can repay the debt over a period, managing his finances better.

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Credit cards provide instant access to credit by financing one’s transactions immediately.

One of the leading factors that attract people to credit cards is their ease of transaction. By converting credit card transactions into EMIs any cardholder can make a high-priced purchase without burning a hole in his/her pocket. Therefore, being able to purchase big-ticket products on EMI is one of the reasons people opt for credit cards. 

Even though there are many digital platforms that have recently emerged offering instant credit and similar facilities as a credit card, there is a separate section of people that sticks to credit cards due to its various benefits and advantages. 

According to the Reserve Bank of India data, the value of credit card transactions rose 26 per cent month-on-month to hit Rs 1,00,943 crore in October last year, due to the festive season spending. 

Having said that, if you are new in the space, firstly you should know what can be converted and what not. “Different banks have different things or items that they permit to be paid via EMI that include the purchase of electronic devices, travel expenses, purchase of apparel, lifestyle-related expenses, insurance expenses, etc.” However, note that banks usually do not allow people to make EMI payments for the purchase of jewellery and precious metals like gold, silver, etc.

Here are some advantages of converting your purchases to EMIs;

Manageable financing option: By choosing the EMI payment facility, a cardholder can repay the debt over a period, therefore, helping him to manage his finances better.

Improves credit profile: With EMI payments, experts say there are fewer chances of a borrower defaulting with the payments. Hence, individuals can improve their credit history gradually over the period. 

Attractive rates of Interest: EMI payments carry a certain rate of interest. However, the same is usually low for purchases that have been converted to EMIs. Additionally, some banks may also not levy any interest whatsoever on a cardholder’s purchase EMI. 

Flexibility in repayment tenure: Cardholders can choose the tenure of repayment on their purchases. The usual tenure allowed for repayment may range from 3-, 6-, 9- and 12 months. Some banks also allow extensions upto 36 months.  

Credit cards provide instant access to credit by financing one’s transactions immediately. However, experts say it is important to note that though card issuers do not charge any interest on transactions repaid by the due date, high interest and late fee applies to those repaid after the due date. 

Hence, keep in mind to always pay credit card bills on time. If by any chance you are unable to repay, then you could consider EMIs for transactions involving longer repayment periods.

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