A convenient way of making a big-ticket purchase without burning a hole in your pocket is by converting your purchases into smaller EMIs. In this type of transaction, the financier pays the seller a lump sum amount. You then repay your financier in bite-sized amounts every month.
Making purchases on EMIs can help reduce the overall strain on your finances and lets you own products instantly, without any compromise. However, this mode of financing comes with its own set of fees and charges, some of which may at times be waived off. Here are 7 things you need to know while converting your credit card purchases to EMIs.
You can request to pay via EMIs by call or online
Today, issuers allow you to split your credit card transaction into smaller EMIs through various channels. If you are not already well-versed with them, you can always call your issuer and gain information on how to convert your credit card payment to EMI. The common ways available are via phone app, and customer care itself.
The entire purchase amount gets deducted from your credit limit
As soon as you make a purchase, the entire amount of the purchase and not just the EMI amount gets blocked from your card. Say you have a credit limit of Rs. 2 lakh and made a purchase worth Rs. 50,000 with EMIs of Rs. 1,000. At the end of your shopping, your credit limit becomes Rs. 1.5 lakh.
Not every purchase can be converted into EMIs
Before completing your transaction, check whether your financier allows EMI payments for that purchase. As per RBI guidelines, EMI financing via credit cards is not an option while purchasing gold. Similarly, you may not be able to split fuel bills, cash transactions, and purchases over one-month-old into EMIs.
Some cards allow you to make instant EMI conversions
If your financier has a direct tie-up with an online shopping platform, you can opt for EMI financing before checkout itself. For example, if you own a credit card like the Bajaj Finserv RBL Bank Credit Card, you can opt for the easy EMI option on major online sites like Amazon, Flipkart, Yatra, MakeMyTrip, Paytm Mall and more.
You can lower your EMIs by choosing longer tenors
The EMI instalment you pay each month is inversely proportional to your tenor. Issuers generally allow you to choose tenors of a few months to a couple of years. Typically, your EMI amount will equal the product price and the EMI charges added, divided by the number of months. While spacing out your purchase can lighten the financial burden, choosing the shortest tenor can bring EMI charges to a minimum.
EMI processing fees and prepayment charges can be reduced
While converting your transaction into EMIs, issuers charge a one-time conversion fee, normally in the range of 2%. While this may be displayed on your issuer’s website, it is negotiable. If you have a strong financial profile and spotless repayment history to back you up, consider talking to your issuer for a rate deduction. The same principle applies to prepayment charges.
Paying your credit card bills on time keeps your purchases affordable
EMI financing helps reduce your financial burden. However, to ensure that your finances remain stable, pay your credit card bills on time. This way, you don’t have to incur any additional interest. If you don’t pay your bills effectively on time, your purchases will get costlier. In case you find it difficult to pay the entire credit card bill in one go, issuers like Bajaj Finserv allow you to convert your credit card bill into EMIs as well! All you need to do is call your credit card customer care number, in this case, 022-71190900 and request this facility.
The Bajaj Finserv RBL Bank SuperCard not only allows you to convert purchases over Rs. 2,500 into EMIs, it also lets you make 50-day interest-free cash withdrawals at ATMs and obtain 90 days personal loan against your cash limit at a nominal interest rate of 1.16%. You can use this 4-in-1 SuperCard to enjoy attractive deals and offers all year round and make annual savings of up to Rs. 55,000 as well.
To get your hands on this powerful card, quickly check your credit card offer from Bajaj Finserv. Doing so will give you instant approval and access to personalised credit card financing.
Additional read: Virtual credit card
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