How EMI Cards Can Help Avoid Credit Card Debt
Credit cards can be a great financial tool to help manage expenses, make purchases, and earn rewards. However, if not used correctly, credit cards can also lead to debt. One way to avoid this and still enjoy the benefits of credit cards is through EMI cards. In this article, we will explore what EMI cards are, how they can help avoid credit card debt, and how the Bajaj Finserv app can make managing your EMI card easy and stress-free.
What is an EMI Card?
EMI stands for Equated Monthly Installments, which is a payment plan option available for credit card purchases. The EMI card is essentially a credit line that is specialized for EMI purchases, meaning that it can only be used for purchases that offer an EMI payment plan.
The EMI card can be used for a variety of purchases, such as electronics, appliances, travel, and even healthcare expenses. Instead of paying for the full purchase upfront, the payment can be split into smaller, manageable monthly instalments over a predetermined period, usually ranging from three to 24 months.
How EMI Cards Can Help Avoid Credit Card Debt
- Lower Interest Rates – EMI cards offer lower interest rates compared to credit cards. Credit card interest rates range between 30-40% per annum, while EMI cards are offered at an interest rate of 12-16%. This means that if you opt for an EMI card, you can save immensely on interest charges.
- No Penalty for Prepayment – EMI cards allow prepayment without any penalty. If you have the funds to pay off your loan amount early, you can do so without incurring any additional charges. This can be very beneficial if you receive any additional additional charges. This can be very beneficial if you receive any additional income or bonuses throughout the year.
- Fixed Repayment Amount – EMI cards offer fixed repayment amounts, which allows borrowers better financial management capabilities. This means that you can budget your expenses effectively and avoid spending beyond your means. Additionally, fixed instalments that must be repaid over a predetermined period can help you inculcate better financial discipline.
- No Annual Fees – EMI cards are offered without annual fees, which makes them an affordable option. Credit cards charge a considerable amount of annual fees, which can add up and affect your credit score.
- Large Credit Limit – EMI cards offer a larger credit limit compared to credit cards. This means that you can make larger purchases without the need for a credit card and potentially end up incurring higher interest rates. EMI cards, therefore, are more financially beneficial than credit cards. They are a great option to acquire a loan with a lower cost of borrowing than credit cards. However, managing your EMI card is just as crucial as maintaining a credit card. Let’s dive into some tips and tricks for managing EMI cards effectively.
Tips and Tricks for Managing EMI Cards Effectively
- Plan Your Expenses – Planning your expenses is the most effective way of managing your EMI card. Once you have decided on what you want to purchase,consider its affordability on your budget and how long it would take for you to repay it within the set repayment period.
- Choose the Right Repayment Plan – EMI cards offer various repayment plans ranging from 3 to 36 months. Choosing the right repayment plan is crucial for managing your finances effectively. Longer repayment periods with smaller instalments may seem attractive but will potentially inflate your total interest charges. Hence, it is advisable to opt for shorter repayment periods with larger amounts of repayment.
- Be Mindful of Your Credit Limit – Although EMI cards offer a larger credit limit, it is advisable to use them to a certain extent and not go overboard with spending. It is crucial to remember that every loan will come with an interest cost, and a larger credit limit can lead to higher interest charges and repayment stress. Ensure that you choose your purchases with care and prioritize the more. important ones.
- Pay your Instalments on Time- Paying your EMI card instalment on time is crucial formaintaining a good credit score and avoiding additional interest charges. Late payments can negatively affect your credit score and may lead to default
Interest Rates (DIR) which can be twice the annual interest rate.
- Pay More than the Minimum Repayment- EMI cards offer flexible repayment options, which means borrowers can pay more than the minimum repayment amount if they are financially capable of it. This will help pay off your loan faster and may lead to lower total interest charges.
- Check the Terms and Conditions – Checking the terms and conditions of your EMI card before use will help you avoid any unwanted surprises or fees. Be mindful of the interest rates, repayment plan, and other fees associated with your EMI card.
How Bajaj Finserv App Can Simplify EMI Card Management
- Instant Activation: The Bajaj Finserv app allows users to activate their EMI card instantly, without the need to visit a physical branch. Users can easily register and start using their EMI card immediately.
- Seamless Payments: The app offers a seamless payment experience, with various payment options, including Auto Debit, Netbanking, and UPI. Users can choose the payment method that works best for them.
- Track Transactions: The app provides users with real-time access to their EMI card transactions, allowing them to keep track of their expenses easily. Users can monitor their spending and make informed financial decisions based on their usage.
- Request for a Limit Increase: With the Bajaj Finserv app, users can request a limit increase on their EMI card. The app provides a simple, hassle-free process to request more credit whenever needed.
- Intuitive User Interface: The Bajaj Finserv app has an intuitive user interface, making it easy for users to navigate and understand their finances. The app offers a personalized and interactive experience, with relevant financial insights, tips, and reminders.
EMI cards offer a better alternative to credit cards as they provide lower interest rates, flexible repayment options, and affordable loans that help improve financial management capabilities. By planning your expenses, choosing the right repayment plan, being mindful of your credit limit, paying instalments on time, and checking the terms and conditions, you can effectively avoid credit card debt and maintain your financial health. EMI cards are a great option for people who need credit but want to avoid high interest rates or fees associated with credit cards. Opting for an EMI card is a financially wise choice, especially when it comes to borrowing money.