Credit Card EMI: How it works and key things you should know - 6 points

Credit Card EMI Process, Charges: Credit cards are a valuable tool if used wisely. With festivals around the corner, credit cards offer the liberty to buy products and make payments later in installments/EMIs. When you convert the amount into EMI, you pay the outstanding money in installments every month just like a loan repayment. Credit card service providers offer a flexible tenor of 3 to 36 months for repayment. 

Although EMI on a credit card can be useful and convenient, there are a few points that you should keep in mind while opting for EMI:

1. Processing Fee: Credit card EMI schemes are subject to a processing fee. It is suggested to check the fee with the card service provider before opting for conversion.

2. Interest Rate: Apart from the processing fee, your credit card service provider will also charge interest on the amount that is to be converted in EMI. Many e-commerce platforms also offer zero cost EMI wherein you don't have to pay any additional/extra amount.

3. Credit Balance: Always check the available credit in the card before payment or converting your transaction in EMI. In case there is no enough credit available, the EMI request can be rejected. 

4. Amount Blocked: If you are converting a transaction in EMI, then the outstanding amount will be blocked by the card company. As you pay EMIs, the blocked amount will be released and added to your credit balance. This way, the total credit balance will start increasing.

5. Foreclosure Charge: In case you want to foreclose, then a charge + GST will be levied.

6. Missed Payment: In case of a missed payment, you will be charged late fees and other charges. Also, additional interest will be charged. You must note that missing payments could affect your credit score.