How To Smartly Convert Credit Card EMI

  Author: Naveen Kumar

A great discount offer on a big ticket purchase like a gadget or a situation when you clock a big bill with payments through a credit card, might make it difficult for you to clear the outstanding balance at one go. Of course, you can pay the outstanding amount by converting it into equated monthly installments (EMI). But how do you do it smartly without hurting yourself financially? Read on to know more.

Enquire about interest free EMI options Many credit cards offer interest free EMI conversion options especially on electronic goods and travel bookings. So, if you have substantial expenses in this category, it is a great idea to avail of this credit card facility. You can pay the dues for the rest of purchases by due date.

Decide within stipulated time You need to remember that EMI conversion is permissible within a limited period after the purchase. Therefore, you need to decide well within this time to pay a lower interest than the one for revolving credit.

Study EMI options The EMI options are typically offered for multiple tenures like 3, 6, 9, 12, 18 and 24 months. The interest rate differs with each option with lowest interest typically charged for the longer tenure.

Remember, longer the tenure, more interest you will end up paying in absolute terms, despite the lower interest rate. Base your decision on your capacity to repay. Choose a combination of a tenure and EMI which you can easily afford and requires repayment for the shortest possible period.

Be prepared for reduced credit card limit If you are preparing to convert a credit card outstanding into EMI, you need to remember that the credit card’s credit limit will be reduced for a considerable period. This is important if you want to keep credit card handy for emergencies. In such cases, the decision becomes easier if you have a second credit card.

Converting a credit card purchase into EMIs is a convenient way to buy a product that is difficult to afford at one go. Follow the basic steps that we have outlined and you will be able to make the most of the credit card EMI option.

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