Credit Card Bill vs EMI: Is it beneficial to convert credit card bills into EMI? Know what will be the impact on your credit score..

Convert Credit Card Bill to EMI: Nowadays people use Credit Card more than Debit Card. Because there is an extra time of about one month to pay the money. Because of this, people sometimes do more shopping than necessary. Due to which a long bill comes. Paying bills of large amount becomes difficult for people many times.

For this reason, many credit card companies also give their customers the option of converting bills into equal monthly installments (EMI). Customers get immediate relief from this option, but does it affect your credit score and financial health? Today we will tell you the answer to this question.

Do you also choose the EMI option on credit card bills?

Often when a high bill comes, credit card users can opt for small, monthly installments (EMI) in a fixed period instead of paying the entire bill at once. However, if you use this option, you will have to pay processing fees as well as interest charges.

Will the EMI option affect your credit score?

Choosing the EMI option will not directly affect your credit score because banks consider it as a repayment strategy. However, how you manage the EMI can make your credit score good or bad. If the credit card EMI is not paid on time, it hurts the credit score. Due to this your credit profile also deteriorates.

Similarly, by paying EMI on time, you can also improve your credit score over time.

Advantages and disadvantages of converting credit card bill to EMI

Advantages

The EMI option gives a lot of relief to the credit card holder by breaking the large bill into smaller amounts to be paid every month. Also, interest rates on EMI (Equated Monthly Instalment) are generally lower than those charged on the outstanding balance when only the minimum balance is paid. In simple words, interest rates on EMI are lower than those charged on the outstanding amount.

Also, making a fixed monthly payment makes it easier to plan finances, and paying EMIs on time maintains a good credit score.

Disadvantages

Talking about its disadvantages, converting the bill into EMI adds additional costs of interest and processing fees. If you do not pay EMI on time, it can affect your credit score. A bad credit score means that it will affect your ability to take loans in the future. So choose the EMI option only if you are confident that you will be able to pay them on time.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.