Through this, you can easily pay your credit card bill without any hassle.
You will have to pay additional interest on paying the credit card bill through EMI
If you have done more shopping with your credit card this Diwali and now you are having trouble in paying its bill, then you can pay the credit card bill in EMI (installments). However, if you want to pay the credit card bill in EMI, then you have to pay additional interest for it. Today we are telling you about the important things related to it.
How does the EMI option work?
If you are unable to pay your credit card bill simultaneously, then it can be converted into EMI. You can choose the EMI duration according to you. Usually banks give time from 3 months to 24 months for this.
what will be the effect on the credit card limit?
If your credit card limit is 50 thousand rupees and you buy an item worth 40 thousand rupees, and pay it through EMI, then your credit limit will be reduced to 10 thousand rupees. Banks usually reduce that card limit temporarily as much as the bill amount is converted into EMI. Which gradually increases with the payment of EMI.
What are the charges to be paid for this?
It is said that not everything has a price. Similarly, if you pay your credit card bill in EMI, you have to pay many types of charges. This is the charge
- Extra interest: You are charged extra interest when you choose to pay the bill ininstallments. The interest rate is usually linked to the loan term. The longer the period, the greater the interest. Typically, this interest ranges from 1.5 to 2% per month.
- Processing fees: Some banks do not charge any processing fees. While many banks charge processing fees of up to 2%.
- GST: GST is applicable at the rate of 18% on all charges and fees.
Go here. The whole math of paying EMI bills
If you choose EMI, then you will have to pay extra interest for it. For example, if you choose a period of 3 months, the bank may charge you an interest rate of 20% per annum. Let’s say the amount of your credit card bill is 10 thousand. If you choose a 3-month (90 days) re-payment option, the total interest will be Rs 493.15 [10,000 x (20% / 365) x 90]. Similarly, you can calculate the interest for any period and EMI.
On the other hand, if you have to choose the EMI option for a period of 12 months and for this you are charged 15% per annum, then you have to pay 1,500 rupees [10,000 x (15% / 365) x 365] as interest. Process fees and GST will have to be paid separately on this.
What to do in such a situation?
If you do not miss the credit card bill on time, you may have to pay a finance charge of up to 40% on the bill amount. Late payment fees up to Rs 1000 are levied separately for non-payment of minimum due amount. This can have a very bad effect on your credit score. Therefore, if you are unable to pay the credit card bill, then it would be right to pay it in EMI.
Know which bank is charging here
|Bank||Interest rate (annually)||Process fee|
|SBI||22 %||2% of the amount converted to EMI|
|Bank of baroda||18 %||2% of the amount converted to EMI|
|HDFC||18 %||2% of the amount converted to EMI|
|ICICI||16 %||2% of the amount converted to EMI|
|Axis Bank||18 %||1.5% of Amount converted to EMI|