How to Use Credit Card EMI Option Responsibly?


Having a credit card EMI option can be a useful tool for making big purchases without having to pay the entire amount upfront. Not only does it help in managing finances, but it also offers flexibility and affordable repayment options. However, it is crucial to use this feature responsibly to avoid falling into a debt trap.

Before availing a credit card EMI plan, it is essential to understand how it works. This article will provide you with all the information to make an informed decision.

Credit Card EMIs: An Overview

Credit card EMI (Equated Monthly Installments) is a payment option offered by credit card issuers that allows users to convert their high-ticket purchases into affordable monthly payments. Under this option, users can break down their purchases into smaller installment amounts, which they can pay back over a specific period, usually ranging from 3 to 24 months.

To avail the EMI option, a user needs to convert the purchase amount into an EMI plan, which may come with an interest rate and processing fee. It is essential to understand the terms and conditions associated with the EMI plan before opting for it to avoid any surprises later.

Maximizing the Benefits of Credit Card EMIs

Using credit card EMI options not only provides you with the convenience of making big purchases but can also give you rewards, cashbacks, and discounts. Here are a few tips on how to make the most of your credit card EMI plans:

  • Avail discounts and cashbacks: Many credit card issuers offer discounts and cashbacks on selected purchases made through EMI options. Look out for such offers and make the most of them. The Airtel Axis Bank Credit Card has many exclusive benefits for users with a 5L credit limit.
  • Opt for short repayment tenures: Short-repayment tenures usually attract a lower interest rate than long tenures. Opting for a short repayment tenure can help you finish your repayment quickly and save up on interest charges.
  • Make timely payments: Making your EMI payments on time not only helps you avoid late fees and default charges but also improves your credit score. It also ensures that you do not incur any penalty charges.
  • Reconsider the frequency of repayments: While most credit card issuers have fixed repayment frequencies, some may offer flexibility in choosing your repayment frequency. Choosing a higher frequency such as fortnightly or weekly can help you make your payments quickly and reduce your interest charges.
  • Keep a lookout for reward points: Make sure you check your credit card statements for accumulated reward points. You can redeem these points for various offers such as cashbacks, discounts, or vouchers to shop at your favorite stores.

By following these tips and regularly monitoring your credit card statements, you can maximize the benefits of your credit card EMI plans and save on interest charges.

Responsible Repayment of Credit Card EMIs

Repayment of credit card EMI plans is a crucial aspect of availing this facility. Late payments or defaulting on payments can lead to significant penalties and adversely impact your credit score. To avoid such consequences, it is essential to make timely payments and be aware of the repayment amount and due dates.

Most banks offer a minimum due payment option, which allows you to pay a smaller amount than the total EMI due for the month. However, this increases the interest and leads to a longer repayment period. It is advisable to pay the full EMI amount or as much as you can afford to reduce the interest rate and shorten the repayment period. In case you withdraw cash from credit card, make sure to check out the policy for the same.

If you miss the due date for payment, the bank will levy a late payment fee, which increases with the number of days the payment is delayed. To avoid late payment charges, set reminders or automatic payments to ensure timely payments.

If you decide to pre-close the EMI plan, be aware of the pre-closure charges, which vary from bank to bank. Some banks charge a percentage of the outstanding balance, while others have a fixed fee. It is essential to read the terms and conditions carefully to avoid any surprises.

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