Credit Card EMI Update – In the modern era, credit card EMIs have made shopping much easier for people. Many people don’t fully understand the underlying costs, increasing their total payment amount. The actual costs of credit card EMIs and important information related to them have also been shared.
You can make a wise decision. If you make an informed decision, you will benefit. You may be surprised to learn that when you purchase a product on EMI, banks charge you not just the instalment payment but also several other fees. You can easily learn about these, which will eliminate confusion.
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Know the real truth about EMI?
If you purchase an item on EMI, banks charge you not only the instalment payment but also several other fees. This includes a processing fee, which can range from 199 to 1000 rupees. GST is also included, increasing the total cost.
Customers planning to discontinue EMIs must also pay foreclosure or pre-closure fees. No-cost EMIs are also heavily promoted, claiming no interest is charged. However, the truth is that there is no hidden interest. Furthermore, the discounts offered by shopkeepers are not available under EMI plans.
Learn how EMIs increase expenses
For example, if you pay an EMI of ₹12,000 for a ₹60,000 mobile phone, the EMI is approximately ₹5,400 per month. The total payment at the end of 12 months will be approximately ₹64,800. However, after adding processing fees and GST, the total expense reaches ₹65,500 to ₹66,000. Customers have already paid an additional ₹6,000 directly.
Some banks also offer cashback EMIs, where a portion of the interest is refunded later. Benefits are only available if the customer keeps the card active, pays bills on time, and avoids defaults. Any minor delay may result in the cancellation of the cashback.