Keep these 5 things in mind before opting for EMI on credit card, never get trapped in debt trap

 Today two out of three people living in metro cities are using credit cards. With the increasing use of credit cards, the incidence of falling into the debt trap has increased. This is because all banks are offering the option of converting to EMI to pay bills after credit card purchases. In this affair, many people are going out of the budget and making big purchases. They think that they will pay the bill in EMI. However, later they are not able to repay and end up in debt trap. We are telling you 5 things so that you too do not get trapped in this trap. By following this, you can prevent yourself from getting trapped in the debt trap. 

Convert bill to EMI as per need

Rohit Chhibber, Head of Credit Cards, Paisabazaar, told India TV that credit cards have the option of converting the entire bill, part of it or a select transaction into EMIs. So before converting your credit card bill into EMI, calculate how much bill you can pay, and how much you should convert into EMI so that you avoid paying more interest. Because whatever bill you convert into EMI, it attracts heavy interest. If you are thinking of a big transaction with a credit card, then credit card users should also compare options like personal loan and loan against credit card, as sometimes their interest rates are lower than the interest rates applicable on credit card EMIs. Is.     

When to opt for balance transfer

If your credit card does not have the facility of EMI conversion, or the interest rate is too high, then you can opt for a credit card balance transfer. Under this, you can transfer your credit card bill to any other bank's credit card, and then convert it into EMI and pay it easily. 

 

Do Compare Interest Rates

On converting the outstanding credit card bill into EMI, you have to pay interest at the rate of 18% to 49% per annum. However, the interest rate applicable on EMI conversion depends on the credit profile of the cardholder, his repayment record and transaction pattern. So, if you have multiple credit cards and are planning to do some credit card transactions that will need to be converted into EMIs later, do compare all your credit card interest rates, and choose the one that best suits you.

Choose the EMI payment tenor wisely

Chhibber points out that the payment tenure for credit card EMI conversion can vary depending on the bank and the EMI conversion facility chosen. Usually this period is between 3 months to 48 months. The longer the tenure, the higher the interest will have to be paid. Hence, credit cardholders should always opt for the shortest tenure during which they can comfortably repay their EMIs without putting pressure on their essential monthly expenses. 

Also check out other credit options 

 

Those planning to convert a large credit card purchase into EMI should look into the availability of no-cost EMI facility. Since the interest is waived off by the merchant in case of no-cost EMI, the credit cardholder has to repay the principal amount of the purchase in the form of EMI. However, the cardholder will have to pay GST on the interest.