Apply for a credit card to avail 5 crucial credit card EMI facilities

Credit cards are excellent financial tools providing access to instant credit for financing your regular transactions or transactions for big-ticket purchases. In other words, they are convenient alternatives for both offline and online transactions. Usage of them renders their users with benefits in reward points, cash backs, discounts, offers, vouchers etc. Thus, those who are new to credit should always consider applying for a credit card to avail such benefits linked with credit cards and also build their credit score by adopting a healthy credit habit, which in turn assists at boosting their eligibility for loans and credit cards.

Though credit card issuers do not attract any interest on the transactions if the outstanding dues are repaid on time, those outstanding dues repaid after the credit card due to date levy heavy finance charges. Thus, for those transactions needing longer repayment tenures, credit card users must consider availing of different types of credit card EMI such as EMI conversions, loans against a credit card, merchant EMI offers based on their credit needs.

Here, we will discuss 5 crucial advantages of opting for credit card EMI facilities:

Can pay back your unpayable credit card dues at extremely lower interest cost:

Non-repayment of the credit card dues on time attracts heavy finance charges of between 22% p.a. and 49% p.a. depending on the card issuer and credit card being used. Moreover, the inability to make payment of the minimum amount due (MAD) additionally attracts late payment fees of up Rs 1,300 per month basis on the card issuer and outstanding bill amount. Furthermore, non-clearance of the outstanding bill dues also results in withdrawal of the grace period or interest-free period on all the fresh card transactions till outstanding credit card dues are repaid in full. Note that constant failure to clear the whole card due on time can sweep one into a potential credit card debt trap.

One of the prudent ways to steer clear of such credit card debt traps is to opt for the credit card EMI option, and wherein one can convert their whole unserviceable credit card due into EMIs. The interest cost that is charged for such EMI conversions usually range anywhere between 11 and 24% p.a. basis the issuer and their credit risk assessment of the credit card users’ credit profile.

Funds your consumption without having to compromise on your liquidity

As credit card EMI conversion’s repayment tenure usually ranges anywhere from 3 to 60 months based on the type of EMI selected, credit card holders can simply make payment of their credit card outstanding dues in smaller portions at a lower cost basis their repayment capacity. Thus, the ones witnessing any kind of fund shortages or mismatches for their consumption requirement can buy the goods or services via credit cards and then opt for the EMI conversion option to convert such transactions individually or entirely into EMIs, which actually helps to keep your liquidity intact.

Accessibility to enticing merchant EMI offers

Most of the merchants, stores and e-commerce portals provide EMI conversion facilities on their products and services purchased via credit cards. These EMI options are provided based on the amalgamation between a specific merchant/manufacturer and credit card issuers. Though the rate of interest and tenures are fixed based on the tie-ups, the EMI rate of interest offered by merchants or manufacturers might beat the rates levied on regular EMI conversions made by card users once they purchase the goods or services. Thus, those cardholders planning for making big-ticket buys must ensure to check with the e-commerce portals and other stores for the availability of any merchant EMI offers on the goods or services they are looking to buy. No documentation is needed for availing of such merchant EMI offers. Card users only require to inform the store on whether they want to choose the EMI option. In the case of e-commerce portals, credit card users are required to choose the option on the online platform to avail of the merchant EMI offer.

Accessibility to no cost or zero cost EMI options.

The no-cost EMI or zero-cost EMI option is just a variant of the merchant EMI scheme where the interest amount on the EMI option is met by the manufacturer or the merchant, and the goods or service buyer is needed to just repay the buying amount through EMIs. Note that the cardholders require bearing the GST cost charged on the interest amount. However, few of the credit card issuers even provide additional cash backs or discounts to their cardholders on conducting the buys via no cost or zero cost EMI option, depending upon the tie-up with manufacturer or merchant. Such cashback or discount offers on a no-cost EMI scheme helps to make up for the GST cost levied on the interest amount.

Accessibility to instantaneous credit for meeting financial exigencies, mismatches or shortfalls

Credit cardholders having good repayment history and an excellent credit profile are even offered the option of loan against credit cards. Such loans are nothing but pre-approved in nature that is disbursed against the card users’ credit limit. The credit limit gets temporarily blocked till the extent of the loan amount is disbursed. The blocked credit limit gets freed up slowly as and when the issuer receives the EMI repayment on time. However, note that there are few of the card issuers that even offer a kind of variant of credit card loan where the card user can take up the loan amount over their credit limit without having to block their credit limit, which actually keeps their limit free for making their regular transactions.

Loans against credit card’s tenure usually range anywhere from six to sixty months and are repaid in the form of EMIs. Though the interest rate of such credit card loans differs based on the credit card issuers and the card users’ profile, they are usually slightly higher when compared to their alternative credit option, namely personal loan.

As they are pre-approved in nature, these credit card loans have one of the quickest processing as well as disbursals among all the credit types. Most credit card issuers usually sanction the loan on the same day of submitting the loan application. It makes such loans one of the fastest options for meeting instant financial emergencies or shortfalls.