Using a credit card for large purchases is common. But paying off big bills later can be stressful. In such cases, converting your credit card balance into EMIs is a good option. Credit cards make shopping easy. With just a swipe, you can complete transactions instantly. Most banks offer credit cards with minimal paperwork. Plus, you earn reward points, cashback, and discounts on every transaction. A credit card gives you access to credit anytime, anywhere. However, excessive use can lead to high outstanding amounts.
The realisation hits when you see a huge bill. A large due amount can be difficult to manage. You can reduce this burden by converting your balance into EMIs. If you are in this situation, opting for a credit card EMI is a smart move.
Benefits of Converting Credit Card Outstanding into EMIs Lower Interest Rate
Choosing the EMI option reduces interest costs. Banks usually charge interest only on the unpaid balance, not the entire amount. For example, if your outstanding amount is Rs 50,000 and you pay Rs 10,000, interest applies only to Rs 40,000. This makes EMIs a cost-effective way to manage credit card debt. The interest rate on EMIs is usually lower than the normal credit card interest rate, which can be as high as 36% annually. Additionally, banks often offer promotional low-interest rates on EMI conversions. This means you can avoid paying high interest while managing your payments better. By selecting the EMI option, you can break down a large debt into smaller, manageable payments without facing excessive charges.
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Flexible Repayment
EMIs allow you to repay over a longer period. Small instalments ease financial pressure. But avoid paying only the minimum due. It attracts a 5% charge on the outstanding amount, leading to growing debt with interest. Many banks offer flexible EMI tenure options, ranging from 3 months to 24 months, depending on your financial capability. This allows you to select a repayment plan that best suits your budget.
Adhil Shetty, CEO of Bankbazaar.com, says, “If you have a sudden financial crunch, converting your credit card balance into EMIs ensures you do not default on payments. Having a structured repayment plan also means you can avoid unnecessary penalties. The flexibility in repayment makes it easier for cardholders to manage their finances without falling into a debt trap.”
Maintains Credit History
EMIs do not harm your credit history.
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