Things to keep in mind while opting for EMI on your credit card

EMI on credit card can be useful and convenient, however there are circumstances in which it is advisable to use this facility. EMIs are useful when you want to buy something that your bank balance doesn’t support. Also, when you end up spending more on your credit card, EMIs can save you from the high interest rates. In this case, getting the EMI option can reduce your interest rate by half. Moreover, these options are available on click of button or through a call itself. Sometimes even your Credit Card statement can help you find this option. Things to keep in mind.
Processing fee:
EMI schemes are subject to a nominal processing fee. Please check before opting.
Available credit:
You should ensure that you have enough credit in your card so that your EMI request is not rejected.
Provisional decline of your credit limit:
As soon as your EMI scheme begins, your bank will temporarily block an amount equal to the value of the purchase you have made through the EMI option. However, as you start paying back your EMIs, your bank will again start increasing your credit limit by the amount equal to your monthly EMI.

Know what can be converted and what not:
Different banks have different things or items which they permit to be paid via EMI that include purchase of electronic devices, travel expenses, purchase of apparel, lifestyle related expenses, insurance expenses, etc. However, most banks do not allow customers to make EMI payments for purchase of jewellery and precious metals like gold, silver etc. Advantages.

Manageable Financing Option:
By choosing the EMI payment facility, the customers can repay the debt over a period of time, helping them to manage their finances better.

Improves Credit Profile:
With EMI payments, there are less chances of a borrower defaulting with the payments helping individuals improve their credit history gradually over the period of time.

The author is Head of Credit Cards, AU Small Finance Bank