Credit card companies generally offer a partial payment option. But do you find it worth paying interest in addition to the payment of bills? This may seem like a pricey option. And it is, since some banks charge interest rates as high as 36% on the unpaid amount. This gets us to plan for a personal or a secured loan, against gold or FD, as interest rates are comparatively lesser in such cases. Personal loans can be availed at interest rates ranging from 13% – 22% and get 10.5% to 12.5% in case of loans against FDs. However, there are a number of legal formalities one has to cover to get approval for the loan. Therefore, the best option in such situations is to cover credit card dues into EMIs.
Converting the Credit Card Dues into EMIs is the most suitable and a stress-free option if you are worried to meet the payment deadlines. You can bifurcate the amount in a period ranging from 3 to 12 months. The interest rates come to be half of the credit card dues. Thus, a 30% interest rate shall convert into 15% charge. Furthermore, the conversions do not require much of a formal paperwork. You are just required to connect your bank through email or a personal request.
Nowadays, most of the credit card firms offer this option. Also, if the company affiliates with any of the e-commerce websites, you can directly avail EMI options on shopping. A survey conducted by first Data proves the EMI option using a credit card has heightened by 10 times in a year. Moreover, The Reserve Bank of India has passed disclosure norms regards the EMI expenses. Thus, the websites and stores have to necessarily inform the EMI interest rates to their customer beforehand leading to no hidden charges.
Always remember that the credit card limit reduces to the extent of the EMI. Also, late EMI payment attracts large interest rates. Thus, it is always recommended to avail the option only on high-end purchases such as electronics, furniture and fixtures, iPhones, laptops, vacation packages and consumer durables. The second disadvantage of an EMI option is there’s no benefit to get a rebate that is possible if you make complete payment at once. Hence, it is always recommended to enquire at the store before availing the option. Do identify if the conversion option is the best solution out of all.
Concluding our research and experiences, the top reasons to why credit card payments can be converted into EMIs are:
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