A credit card can fund all your dreams and requirements. It is a line of credit which is always in your pocket. All you need to do is swipe your card or type in the magic numbers to make your dreams a reality. Credit cards also come loaded with a ton of benefits such as rewards programme, promotional offers and extensive discounts. Understandably, all this information likely to make you excited about applying for a credit card. But credit cards come with a set of terms and conditions you must follow to save yourself from falling into a debt trap. The first thing to know before indulging into a whole new lifestyle experience with your credit card is to understand its repayment.
One of the most convenient repayment methods of your credit card bill is to convert it into comfortable EMIs, using a credit card EMI calculator. Here are a few pointers which will help you understand how EMIs work on a credit card.
What is the EMI payment option on a Credit Card?
If you have a big purchase, you don’t have to worry about making the payment on the spot. And with the EMI option, you don’t even have to worry about paying the amount at the end of the month when your credit card bill surfaces. An EMI on a credit card is very similar to an EMI on a personal loan, which you can check through a credit card EMI calculator,except that you don’t have to apply for a loan and wait for its disbursal. Some credit card companies, in collaboration with the merchants, offer you the option of converting your big purchases into comfortable monthly instalments over a period of time. You can choose this tenure according to your monthly repayment capacity and calculate your EMIs with an EMI calculator online. You can pay the amount in easy instalments as monthly EMIs over 3 months, 6 months, 9 months, 12 months or 24 months. Generally, the credit card company will charge you a nominal interest on choosing this repayment option. But there are a few purchases which you can make using the No-Cost EMI option too, where you can check your EMIs with an EMI calculator online.
What is No-Cost EMI?
A no-cost EMI is a scheme which a merchant or a retailer may offer in which you only need to pay the product prices, divided into convenient EMIs, which you can check with an EMI calculator online, without any interest. Most top online retailers offer this scheme. However, this option must be available to you by the bank and they also offer you a bank EMI calculator to understand your EMIs better. You are not required to make any down payments or pay an additional fee to avail this facility.
Some other things you must know when choosing the EMI payment option on credit cards:
Processing Fee: If you opt for the EMI payment option, using the bank EMI calculator, the credit card company may levy a small processing fee. This is usually a small percentage per Rs 1000 you convert into EMIs. If you opt for a no-cost EMI or Zero EMI scheme, no processing fee is charged.
Available Credit: Just like other credit card payments, you need a certain credit limit to opt for an EMI scheme. You need to have at least an equivalent amount available as credit to get your EMI request approved. Check your EMIs through the no cost EMI calculator.
Temporary Reduction in Credit Limit: When you make a purchase through the EMI option, the bank reduces your credit limit by the full amount. As you pay your EMIS, decided by the EMI calculator online, the bank increases your credit limit by the amount equivalent by the monthly instalment you make as repayment.
Pre-payment Facility: If you come across a sum that allows you to pre-pay your bill and stop your EMIs, you can do so. The credit card company may charge 2-3% of the outstanding balance as a pre-payment charge.
Opting for an EMI scheme, through the bank EMI calculator, not only offer convenience but also helps in building your credit score.