New Delhi: As the festive season is fast approaching, e-commerce and various shopping platforms are offering discounts and cashback offers. Most of these offers are on credit and debit cards. Are you a credit card holder? Now is the perfect time for you to make credit card purchases as the festivities are around the corner.
Credit cards give you the freedom to buy goods now and pay later in EMIs or installments. When you convert the amount into EMI, you pay the monthly installment on the outstanding amount, just like you would for a loan. Flexible repayment tenure for credit card services ranges from three to thirty six months.
Even though EMI on credit cards may be practical and easy, there are a few things to consider before choosing an EMI.
processing charge
There is a processing charge attached to the credit card EMI plan. It is advisable to speak to the card issuer about the charges before choosing a conversion.
rate of interest
Your credit card service provider will charge interest on the amount to be converted into EMI in addition to the processing fee. Many e-commerce sites also offer free-of-cost EMIs, which do not require any additional payment.
credit card balance
Always check the available credit of the card before making a payment or converting your transaction into EMI. EMI request may be rejected if sufficient credit is not available.
Amount deposited
If you are converting any transaction into EMI then the card issuer will stop the outstanding amount. As soon as you pay the EMI, the blocked amount will be released and will be applied to your credit balance. This way the entire credit balance will start rising.
foreclosure fee
If you decide to foreclose, charges and GST will be assessed.
EMI missed?
If a payment is missed, you will be assessed a late fee in addition to additional costs. In addition, interest will also increase. You should know that missed payments can lower your credit score.