New Delhi: Credit cards can be a useful tool if used properly. With a credit card, you can buy goods and pay them later in EMIs or installments, which is convenient in the approaching festivals. When you convert the amount into EMI, you pay the outstanding amount in equated monthly installments, just like you would for a loan. The credit card allows companies to repay the money in a simple period of 3 to 36 months.
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Even though EMI on credit cards is convenient, there are a few things to consider before choosing an EMI:
-As credit card EMI plans are subject to processing charges, it is recommended to check the charges with the card service provider before opting for conversion.
– Your credit card service provider will charge additional interest on the amount to be converted into EMI in addition to the processing fee. Many e-commerce sites also offer zero-cost EMI, which does not require additional payment.
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.
If you are converting any transaction into EMI then the card company will block the outstanding amount. As soon as you pay the EMI, the blocked amount will be released and added to your credit balance. This way the overall credit balance will start rising.
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If a payment is missed, you will be assessed a late fee in addition to other charges. In addition, interest will also increase. You should know that missed payments can lower your credit score.
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