How To Smartly Convert Credit Card EMI

Welcome to FundooMoney, your 24X7 buddy for all your money matters! A great discount offer on a big ticket purchase like a gadget or other times 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 instalments (EMI). But how do you do it smartly without hurting yourself financially? Smart tips are coming right here at FundooMoney, in just a little while.

While converting your credit card outstanding into EMI, you need to do the following things:

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 card.

We hope you found this useful. If you think we missed out something here, please do provide your tips in the comments section. For more such actionable personal finance information and regular uploads, subscribe to our channel. Also, visit our website, download our mobile app and stay connected with us on Instagram, Pinterest and Slideshare.