EMI (Equated Monthly Installments) card is an excellent financial tool that helps you to shop for your favourite products and pay for them with an easy payment plan. It works by providing you with instant credit that you can use to purchase products, and in turn, pay for them in easy monthly installments. EMI cards are different from credit cards in the sense that while credit cards may offer EMI options, they also come with hefty interest rates that can accumulate over time. EMI cards, on the other hand, are specifically designed to help you make purchases with a pre-defined payment structure while offering you the benefit of no interest on select products.
A credit card is a financial tool that allows an individual to purchase products or services on credit. It works by giving the user a line of credit, which can be used to make payments on products or services that they then pay back in monthly instalments or in full. When using a credit card, the card issuer or bank charges interest on the amount spent, making it an expensive option over the long term. That’s why it’s important to use a credit card sensibly and to pay back the amount owed on time.
On the other hand, an EMI card is a card that allows you to make purchases and pay for them in easy monthly instalments. Unlike a credit card, EMI cards do not accrue interest on the principal amount spent. Instead, the payment structure is predefined and ensures that you pay off your purchase over a set period of time. The simple interest, processing fees, and prepayment penalty – if applicable – are charged upfront, and this interest amount is then divided by the number of months you pay the EMI over. This structure allows you to budget your expenses and plan ahead, making it a smart financial choice.
One of the significant differences between a credit card and an EMI card is that the latter has a more structured payment plan, and the interest charged upfront means that you don’t have to worry about interest charges mounting up if you can’t pay your balance in full. With a credit card, you typically get a bill that will include your outstanding balance and the interest to be paid on that balance. This full amount needs to be cleared within the due date to avoid additional interest charges. This structure means that credit cards are a more costly option over time due to the higher interest rates.
Moreover, a credit card has a revolving credit limit, which means that you can use your card up to the maximum credit limit, and your credit limit will replenish as you pay back the amount due. This revolving credit limit can be beneficial if you need to make purchases that exceed your credit limit, but it also makes it easier to overspend and fall into a debt trap.
On the other hand, EMI cards offer a fixed repayment structure with lower interest rates, making it a better option for those who want to pay in instalments and prefer fixed payment cycles.
If you’re interested in getting an EMI card, the eligibility criteria may vary depending on the lender. Some factors that may be considered include age, income level, credit score, and employment status. However, with the Bajaj Finserv App, the eligibility criteria are quite simple, and it offers an excellent resource that explains the terms and conditions for their EMI card offering.
Now, let’s take a closer look at how you can use your EMI card to its maximum benefit.
- Shop Smart: The first step to using your EMI card wisely is to make wise purchases. One of the benefits of the EMI card is that it offers payment plans without any interest or processing fees, allowing you to pay for the products over a period. Therefore, it’s vital to look for high-value products that you need to make a purchase on. Furniture, electronics, and home appliances are some examples of products you can use your EMI card for.
- Choose the Perfect Payment Plan: Once you’ve picked the product you want to purchase, select the EMI tenure that suits you. The length of the payment plan is the number of months it will take you to pay off the purchase. The longer the payment plan, the smaller your monthly payment, so choose wisely. However, it’s recommended to pick a payment plan that saves you money in the long run not just the short term, after all, that’s what an EMI is all about!
- Budget Your Expenses: When using your EMI card, make sure that you budget expenses carefully, so that you don’t overspend. A great way of doing this is to go through your monthly expenses and calculate your spending to ensure that you can afford the instalments. This also helps you plan your cash flow better and ensure that your investments are in order.
- Look for EMI Card Offers: Many vendors and stores will offer you great discounts and cashback deals when you swipe your EMI card. Keep an eye out for these offers and grab any that come your way as this will help you save a considerable amount over time.
- Manage Your EMI Plan: Finally, ensure you keep track of your EMI payment schedule, as missing payments can result in interest-rate charges and penalties from your lender. One way to manage your payment plan is by setting up alerts or reminders indicating when your payments are due, making it easier to stick to the plan.
When it comes to getting the most out of your EMI card, knowing the specific benefits it provides goes a long way in helping you make the right choice. With the Bajaj Finserv app, you can easily manage your EMI card account and enjoy a host of other benefits too. The app offers 24/7 access to your account, e-statement requests, and convenient payment options, including the auto-debit option. Plus, it’s all user-friendly, which makes it easier for beginners and users alike.
In conclusion, EMI cards are a great way to make purchases without putting unnecessary strain on your finances. The key is to shop smart, choosing high-value items and carefully budgeting your expenses. Bajaj Finserv EMI Card that comes with attractive interest rates, convenient payment options, and easy terms and conditions, making it one of the best options available in the market. So go ahead and use your EMI card to its maximum benefit, and watch your purchases lead you to a better financial future.