A credit card EMI is a popular way to spread the cost of big purchases over time. It offers flexibility and rewards, making it a good choice if you like extra perks. However, you can also enjoy the benefits of the EMI facility with a debit card.
Both options have their own benefits and drawbacks. However, choosing between credit card and debit card EMIs depends on your priorities. Here is an overview of both options to help you make an informed decision.
Credit Card EMI and its Features
It is a handy feature that lets you turn big purchases into smaller monthly payments and helps manage significant expenses. It also lets you spread payments over time for better budgeting. This way, you can keep your savings intact. As such, this option gives you flexibility to manage expenses without hurting your finances.
Most issuers allow you to choose a comfortable repayment period, which depends on your credit card issuer’s terms. The interest rate, fee, and payment period are set in advance. This way, you can plan your finances without any surprises.
Here are some of its key features to note:
- Interest Rates: Usually range from 14% to 18% per year, depending on the card issuer and the repayment period
- Processing Fees: A small percentage of the transaction is often charged as a processing fee, the rate of which depends on the issuer
- Flexible Tenure: Choose a repayment period that suits your finances
Feature | Details |
Interest Rate | 14% to 18% per annum |
Processing Fee | Nil to 3% of the transaction amount |
Tenure | Up to 48 months |
Prepayment Charges | Nil to 3% |
Debit Card EMI and its Features
This EMI option also lets you convert purchases into monthly instalments. The payments are deducted directly from your bank account. It is an excellent option for you if you want to manage your finances without using a credit card.
This service is for pre-approved customers who meet the bank’s requirements. The EMI amount is taken directly from your savings account each month. It is an easy option to cover for big expenses.
Here are some of the key features of debit card EMI:
- Interest Rates: Generally lower rates, often starting from 12% per annum
- No Processing Fee: Many banks do not charge a processing fee for Debit Card EMI
- Eligibility: Based on your relationship with the bank and your transaction history
Feature | Details |
Interest Rate | 12 to 17% per annum |
Processing Fee | Usually None |
Tenure | 24 to 36 months |
Prepayment Charges | Typically none |
Credit Card EMI vs. Debit Card EMI
- With a credit card, you make the complete payment with borrowed funds from your issuer
- On the other hand, a debit card allows you to convert your purchase into EMI, which you have to pay by depositing money into your bank account
- Both cards give you flexible repayment options, allowing you to manage your big-ticket expenses along with your budget
- You choose a comfortable EMI amount that fits your budget
- In case you default on your debit card EMI, you only have to pay late payment penalties and a nominal interest rate
- But with credit card EMI, you have a higher penalty charge and higher accumulated interest
- Delaying your EMI for a long time leads to debt accumulation, which also affects your credit score
- Nevertheless, a credit card is a feasible option to shop when you don’t have funds in your bank account
- Considering the eligibility factor, anyone can convert their purchase into EMI with a credit card
- To acquire this option on your debit card, you need to have a good credit score and default free-credit history
- In case you have ever missed a few EMIs, then it may be difficult to get the option
In conclusion, choosing between both EMI methods depends on your financial habits and needs. If you want lower interest rates and fewer fees, debit card EMI might be a better option. It’s simple and helps you manage purchases without high costs.
If you want to build your credit score and have flexible payment options, credit card EMI could be more beneficial. It lets you spread out payments and can improve your credit score, too.
If you have the One Credit Card, you don’t have to worry about interest rates as you enjoy no-cost EMI. In addition, you can earn 5X reward points on your top two spending categories each month and hefty discounts and cashback.
To easily manage your EMI payments and track expenses, you can rely on the One Credit Card App. Here, you can not only track your rewards and offers but also convert any purchases into EMI without waiting for approval. Apply online for the One Credit Card today to take control of your finances and enjoy these benefits.