Don’t have money? Use EMIs to pay card bills

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To pay credit card bill, people usually make minimum payments. Because they probably do not know that they can pay through EMI by dividing the credit card bill into installments. The customer can also choose the period of payment of the bill. But it is not that the EMI option will be 100% beneficial. It is also expensive. So should you  choose the EMI route? Credit card dues are unsecured loans which are quite expensive. If one is unable to arrange money from anywhere, then, he can opt for EMI option by breaking the bill into a small amounts. But, he should choose this option only when he is sure of making this payment. Be it a credit card company or a bank, interest will also be levied on this EMI, but this interest will be less than the interest charged on the outstanding amount. If the interest on credit card dues is levied in the range of 24 to 48 percent, then the interest on EMI amount will be in the range of 15 to 24 percent.

What will be the benefit of the EMI option If one makes the minimum payment, the credit score does not get any worse but the outstanding amount continues to pile up. The interest meter on the dues will continue to tick. In such a situation, if the full limit of the card is utilised, then one can land in the danger zone. Full utilisation of the credit limit means that the credit utilisation ratio is high. it spoils the CIBIL score as well. The effect of this will be that getting loans in future may become difficult. At the same time, if one opts for EMI, then he will be reducing his debt by paying the outstanding amount. If he keeps paying regular EMIs without any delay, he will avoid making default.

If you are successful in paying off this debt, then learn from it in the future.

• Use your credit card according to your ability
• Maintain discipline during shopping
• Do not use the entire credit limit
• Choose the option of minimum payment and EMI only when necessary
• Do not make this a habit