Common Mistakes to Avoid with Credit Card EMI

Credit card EMI (Equated Monthly Installments) can be a convenient option for making large purchases, but there are some common mistakes that you should avoid to ensure that you don’t end up paying more than you need to. Here are a few mistakes to avoid:

Not understanding the terms and conditions: Before opting for a credit card EMI, make sure you understand the terms and conditions of the offer, including the interest rate, processing fee, prepayment charges, and other relevant details. Read the fine print carefully to avoid any surprises later on.

Choosing a long repayment tenure: While longer repayment tenures may seem attractive because of the lower monthly payments, they can end up costing you more in the long run due to the higher interest charges.

Choose the shortest repayment tenure that you can afford.

Not comparing offers: Different credit card issuers may offer different interest rates and processing fees for EMI options. Compare offers from multiple issuers to find the best deal.

Using EMI for small purchases: Credit card EMI is typically designed for larger purchases. Using EMI for small purchases can result in unnecessary fees and interest charges.

Not paying on time: Late payments can result in hefty penalties and interest charges. Make sure you pay your EMI on time each month to avoid these charges.

Not paying the full balance: Carrying a balance on your credit card from one month to the next can lead to high-interest charges, which can be difficult to pay off. It’s best to pay the full balance on your credit card each month.

Making only the minimum payment: Making only the minimum payment on your credit card can lead to high-interest charges and can extend the time it takes to pay off your balance. It’s best to pay as much as you can each month to reduce your balance.

Using credit cards for cash advances: Taking a cash advance on your credit card can lead to high-interest charges and fees. It’s best to avoid using your credit card for cash advances whenever possible.

Not monitoring your credit card usage: Failing to keep track of your credit card usage can lead to overspending and missed payments. It’s important to monitor your credit card activity regularly to ensure that you’re not exceeding your credit limit or missing payments.

Applying for too many credit cards: Applying for multiple credit cards within a short period of time can negatively impact your credit score. It’s best to apply for credit cards only when necessary and to limit the number of applications you submit.