Are you someone who loves to purchase expensive items or antiques etc. But you do not have the net cash, and hence purchase your desire with the help of your credit card instead of asking for loans from banks.
But do you repay the credit taken by the due date or you are a defaulter? If a defaulter, then here comes an easy way out. Opt for the EMI option. Confused. Since we have only heard EMI being given for housing loans especially written work from banks.
But these days credit cards also have the EMI facility, making purchase simpler and repay much easier. But the question now that arises is that how is the EMI calculated here.
Simply in layman’s terms, the EMI on credit cards is similar to the housing loan EMIs. It consists of the principal amount and an interest charged upon the principal amount and the duration or tenure.
Simple as it sounds, isn’t it?
But wait, think again, is it really that simple? Though with every EMI, you end up paying more amount, nothing different here.
The catch here is that with an EMI on the credit card, you end up paying additional as they even calculate the service tax and additional tax and GST in the principal amount.
Thus the principal amount is up by 18% to 20%. Secondly, your credit card score limit reduces and hence you cannot make any heavy purchases unless you have repaid your EMIs. Hence before you make any purchases with the credit card on EMI basis, check the terms and conditions and if possible negotiate with the authorities before striking a deal.