Factors to note while converting Credit Card bills into EMIs

Credit Cards offer credit to their users and provide them with the liberty to make repayments in instalments at their convenience. Lately, they are the most useful financial instruments. Whether you need to make huge payments or pay in emergencies, you can use them conveniently anytime.

If you buy a product costing more than your monthly income after applying for a Credit Card, you need not worry about repaying the amount the following month. You can easily break down your repayment amount into monthly instalments and pay it as per your budget.

How to convert payments into EMIs?

Users can repay their Credit Card bill through EMIs at the time of purchase. If they have a certain amount, they can make the down payment while converting the balance into EMIs. The Credit Card meaningv, according to the dictionary, is a small plastic card you can use for payment. The payment amount gets debited from your Bank Account after a certain period.

The bank provides a Loan on the Credit Card bill amount that fits your needs. You get the flexibility to repay it in parts. Before deeming you eligible for EMI conversion, they check your credit repayment history, credit scores, and current Loans.

Factors to note

Banks charge interest on Credit Card bills, which are converted into EMIs. The interest rate, however, varies and depends on the down payment amount, repayment tenure, and other factors. The shorter the tenure, the lesser the interest rates, and vice versa.

Banks usually charge interest on the EMI amount using the reducing balance method. They charge interest on the remaining Loan balance at the end of every month, reducing the interest amount payable.

You can select a repayment tenure between six months and two years. However, the shorter the repayment tenure, the less interest you need to pay.

This is another point to consider when applying for a Credit Card. Some banks charge a minimal processing fee for converting the credit amount into EMIs. They usually waive this fee during the festive season, so you can continue with your purchases then.

If you accumulate the pending Loan amount, you can repay it before the end of the tenure. Some banks may charge a minimal foreclosure fee, while others may not.

Conclusion

While it is simple to convert your Credit Card bills into equated monthly instalments, consider the various factors involved. Not all Credit Card issuers provide EMI repayment facilities, and not all holders are eligible for them. If you opt for an EMI purchase on your Credit Card, borrow the amount for a short period. The EMI calculator greatly helps if you wish to compute the maximum amount you can afford to spend on your Credit Card.