Don't convert your credit card transactions into EMIs
Did your bank offer to convert your credit card transaction into EMI to reduce your financial burden?
Don’t do it unless you are going to default on your credit card bills.
Because on conversion, they will charge you a processing fee of around 2 -3% and an interest rate of 14 - 24%. These charges will differ for each bank.
Your credit card limit will be reduced by the same amount. It will slowly increase as you pay your EMIs. And, because of the reduced limit, your credit utilisation ratio will go up. This will further affect your credit score.
And if you plan to close the loan earlier, you have to pay a foreclosure fee of around 2 - 4%.
That’s why converting credit card transactions into EMI should be your last resort.
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