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EMI or Credit Card Payment?

Prachi Bansal (3124 Points)

20 April 2021

EMI or credit card payment? What should be chosen and why?

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15 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 20 April 2021

EMI is best as monthly payment of minimal amount should be deducted from bank so there will be no tension for making a lump sum payment in one time and relief from huge burden of making payment at the end of tenure

CMA Poornima Madhava (CMA) (13097 Points)
Replied 20 April 2021

Both have their pros and cons I think.

EMI option is preferred, when the money available can be used to earn better income than what one would spend towards interest on loan, or when there is a shortage of funds.

Opting to pay off credit card dues within the credit period can be considered when there is no shortage of money because by taking full advantage of the credit period, we end up paying no interest at all.

Choosing the one that best suits the requirement of the individual would be ideal I think.

Other views are welcome.

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Unmesh (student) (108 Points)
Replied 20 April 2021

EMI is better option as your repayment is distributed over a period however you will have to pay it with an interest or other charges as applicable.

On the other hand on credit cards you need to clear the dues with a short period say 45 days (your billing cycle + allowable days) for payment. You also have a option to pay minimum due which will be a minor portion of the total credit card bill, however it is not recommended as it will have a negative effect on your credit scores. Credit cards will come with an yearly charges or sometimes with nil depending on the terms of issue, generally their is no interest charged on cc spends unless it's converted to EMI or in case of defaults of cc bill payments.

*Now EMI can be done on CC spends as well.

both have their own pros and cons.

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yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 21 April 2021

EMI= loan amount/last year annuity factor+ int included/12

Credit card= principle + interest + short periods only

it depends upon the credit that you take,

credit cards for business is good but overdraft is better, but for personal use, one might have to pay lump sum + interest.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 21 April 2021

This is also a sign f negative economic growth, that is an increase in debt industry without any improvement in standard of living. Sometimes people are lucky, that, students loans, mortgages are waived off By governments. But credit cards don’t have that luck

Prachi Bansal (3124 Points)
Replied 25 April 2021

Originally posted by : Unmesh
	EMI is better option as your repayment is distributed over a period however you will have to pay it with an interest or other charges as applicable.On the other hand on credit cards you need to clear the dues with a short period say 45 days (your billing cycle + allowable days) for payment. You also have a option to pay minimum due which will be a minor portion of the total credit card bill, however it is not recommended as it will have a negative effect on your credit scores. Credit cards will come with an yearly charges or sometimes with nil depending on the terms of issue, generally their is no interest charged on cc spends unless it's converted to EMI or in case of defaults of cc bill payments.*Now EMI can be done on CC spends as well.both have their own pros and cons.

How can EMI be done on Credit Card spends?

Prachi Bansal (3124 Points)
Replied 25 April 2021

Do we have to pay additional charges with an EMI?

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 26 April 2021

I think you will have to pay penalties at some rate.

Prachi Bansal (3124 Points)
Replied 29 April 2021

How can I pay EMIs on credit card payment? Is such a facility available?

CMA Poornima Madhava (CMA) (13097 Points)
Replied 29 April 2021

Yes such options are available. Just log into the bank portal and select a particular credit card transaction for conversion into EMI. Not all transactions can be converted to EMI. The process can differ from one card issuer to another.

Prachi Bansal (3124 Points)
Replied 29 April 2021

So depending on whether the bank offers such a facility or not right?

CMA Poornima Madhava (CMA) (13097 Points)
Replied 29 April 2021

Yes, you are absolutely right.

Prachi Bansal (3124 Points)
Replied 02 May 2021

Credit Card also has various advantages because these days there are many points available on credit card spends as well. So it is like a win-win situation for both