The Indian market features two main payment instruments, Credit Cards, and EMI Cards, for personal finance management of expensive items. The two payment systems provide cashless transacting and flexible billing options, although they serve distinct purposes and contain unique attributes for distinct financial needs. Through the One Andro app, one can talk to an agent and choose the best one that will be suitable for them.
We will analyze fundamental points to look at when deciding whether to use a credit card or an EMI card through this post to help you select the best option.
Understanding the Basics
Credit Card:
When you own a credit card, you can borrow funds from a set limit to both shops and obtain cash through withdrawals. Each month, you receive your bill statement, but if you pay off your full bill amount within the specified grace period between 45 to 50 days, then you will not be charged interest payments. You will face interest charges when you keep an unpaid balance on the account.
EMI Card:
You can obtain pre-approval for a particular loan amount through the EMI (Equated Monthly Installment) Card, known as the Bajaj Finserv EMI Network Card. Your purchase becomes installable at monthly intervals through partner retail institutions with this payment method, which also simplifies approval procedures.
Differences Between Credit and EMI Cards
Usage Scope:
Credit cards are versatile. Online shoppers and bill payers, along with travelers use these payment methods for their purchases and bookings while needing emergency cash. The primary purpose of EMI cards lies in funding high-dollar-value items at dedicated retail locations, particularly electronics and furniture or large appliances.
Flexibility:
The ability to use credit cards enables you to determine the amount and locations of all your purchases without restriction. The primary use of EMI cards lies in breaking down principal payments into regular installment schedules.
Interest Rates:
The interest-free window from credit cards expires when you postpone payment which becomes extremely expensive with interest rates between 30% to 42% annually. Customers benefit from EMI cards because they provide either zero-interest or low-interest rates on payments through promotional offers designed explicitly for significant spending decisions.
Role of Eligibility and Documentation
Credit Card:
Banks maintain strict guidelines that applicants need to meet regarding credit card approval. To determine their credit card eligibility, applicants must show proof of their credit score as well as monthly income history, employment situation, and repayment track record. Professional individuals who earn their salary or run their independent businesses from a stable income foundation are the most desired applicants.
EMI Card:
To qualify for an EMI card, you need fewer strict requirements in comparison to other credit-based products. The required basic documents for approval include a PAN card, an Aadhaar card, a canceled cheque, along with bank information.
Some financial institutions give pre-approved credit card offers to customers depending on their established financial relationships or through simplified paperwork requirements.
Cost Structure of Both Options
Credit Card Costs:
The cost of joining and annual renewals exists, but some cards waive these expenses under specific spending conditions.
High interest charges on outstanding balances
Late payment penalties
Hidden fees for cash withdrawals
EMI Card Costs:
Nominal joining fees (sometimes around ₹500 – ₹1000)
These cards do not impose either minimal or no additional charges for early dishonoring.
The expenses related to EMI cards remain minimal when these cards are utilized thoughtfully by users.
Options for Repayment Tenure
Credit Card:
Payment of all remaining debt should happen at the scheduled deadline according to credit card terms. A cardholder can access EMI conversion when banking with credit cards, but the term lengths span from three to twenty-four months. With the Best Loan Agency, one can get the right credit card suggestion as per their financial situation.
EMI Card:
EMI cards provide purchase repayment terms that span from three months up to 24 months or even extend to 36 months of payment. Consumers benefit from extended payment plans on EMI cards because the arrangements make significant expenses more manageable through monthly budgets.
Finally, on both these aspects, one must consider the fact of credit score and one needs to show financial discipline in credit and EMI cards. Depending on the usability, one must make that decision wisely.
