Making big payments using credit cards and EMIs on it have
become a natural way of purchasing. This is also a convenient way to make your
spending more affordable. However, we must understand that the payment option
of EMI comes with a fee like processing charges, interest of reducing balance,
and penalties for late payments.
You may have experienced how banks/financial institutions
send you the option to convert your big payments into EMIs. For some, it’s a
good idea to break down a onetime purchase, and for others its costs them more.
So, it’s a trade-off between convenience & payments.
Here are a few important things to consider when choosing a
credit card EMI option & how can EMIs feel easy on your pocket.
1: Every Credit Card does not Offer EMI facility
If you’re interested in converting your payments into EMIs,
then check on your bank/financial institution. Many credit card holders
understand this at the time of payment. You must check on it when you’re
getting a credit card sanctioned & thoroughly reading the terms and
conditions of EMI payments.
2: Your Spending Shrinks with EMI Purchase
It’s important to realize that when you convert your big
purchases into EMIs, you’re immediately blocking your credit limit. It’s easy
to avail EMI facility whenever a nee falls upon you. This is great because your
overall spending doesn’t get affected on an everyday basis. Let’s say if you’re
credit card limit is 1,00,000, then a purchase of Rs. 90,000, you will be left
with a limit of Rs.10,000. And once you begin to repay, your credit limit
eventually rises.
3: You can Bargain the Processing Fee
When you use the EMI option, you’re charged a processing fee
by the lending institution. The one-time fee can be a small percentage or a
fixed amount of your loan depending on the card and the purchase amount. Though,
many are not informed but you can attempt to negotiate the bank fees & to
get a waiver on the amount based on your past repayment history & goodwill.
If you think you’ll qualify, give it a try & give yourself some relief.
Also read: Why do People Need Emergency Loans in India?
4: Choose Online Modes of Purchase
Online platforms liaison with banks/ payment companies to
extend EMI option at the time of sales. If you wish to transact using credit
EMIs, then land on shopping marketplaces like Flipkart, Amazon, etc. It’s
possible to get good offers & discounts by waiving off extra charges. Infact,
you can get better EMI deals to save a few buns.
5. Always Pay up your Full Dues
There’s no two way to understand that credit cards are
expensive. So, it’s extremely important to make full payments & avoid outstanding
balances which keep increasing with penalty. An interest of 1-2% monthly may
look negligible, however it can total upto 25-30% almost, turning this into an
superbly expensive deal. Infact, if you have spare cash, invest it to make a
pre-payment in time & negate the charges of it. However, this is only
possible if you’re a bank loyalist. This puts you in a safe zone to negotiate
with your bank.
Opting for an EMI option allows you to maximize your
credibility & financial status. Try to engage with your bank to negotiate related
costs and make the most of the advantages.
No comments:
Post a Comment