Credit Card EMI Payment Benefits: Avoid Fees & Build Credit

It is no secret that the world has embraced digital money with open arms. We all have either a debit or a credit card in our wallets. Credit cards symbolise aspiration as people look to swipe them when they eat, shop, or travel. But it is a tool that must be used responsibly. Timely credit card EMI payment benefits you in many ways. It not only saves money but also insulates your credit history from a poor score. So let’s take a look at some of the most important advantages of credit card EMI payment on time.

Credit Card EMI Payment Benefits

It is well-established that paying your credit card bill on time accrues a lot of benefits. Similarly, there are many advantages of credit card EMI payment on time such as:

1. Improves Credit Score

Every EMI paid on time reflects positively on your credit history after banks report them to the credit bureaus. A good credit score allows you to access better loan terms, lower interest rates, and faster loan approvals in the future.

2. Evade Hefty Fines

There is a hefty penalty if you miss your EMI payments in the form of late fees. They are a cumbersome strain on your account balance because they keep compounding the longer you delay the settlement.

3. Access Credit With Ease

Every bank checks your credit history before issuing any form of a loan or a new credit card. It is easier to procure a loan or any kind of assistance if you pay credit card EMI on time. So try to follow financial discipline and carry a responsible record.

4. Enjoy a Better Credit Limit

There is a possibility that banks will increase your credit limit to reward your disciplined behaviour. An improved credit limit augments your spending capacity and allows you to enjoy more flexibility in terms of large purchases.

5. Alleviates Stress

It is one of the most underrated credit card EMI payment benefits because we often tend to ignore it. The sight of your credit card bill snowballing due to interest is very stressful. Hence, it is always better to eliminate any possibility of financial stress.

ALSO READ: When To Use Credit Card EMI and When to Avoid

Pitfalls of Missing Credit Card EMI Payments

Now that we know how timely credit card EMI payment benefits us, it is important to be aware of the potential risks of missing a credit card EMI payment. Here are some of them:

1. Financial Penalties

It is prudent to beware of interest on late payments. Each bank has a different rate but they have one thing in common— they are all notoriously high. It can be very hard to catch up if you ignore these fees as they compound over time.

2. Drop in Credit Score

Every missed payment affects your credit score negatively. A damaged credit score hampers your chances of getting new loans and credit cards.

3. Debt Trap

A missed EMI payment can put you in a debt trap because of the compounding effect of late fees and interest charges. It imposes a debt burden on your finances and can take a long time to settle it.

4. Impending Legal Action

There is a likelihood that a bank can take legal action against you if you miss multiple payments. Furthermore, this can lead to incessant phone calls for collection and destroy your credibility.

5. Lack of Credit

There is no way a bank will offer you new loans or credit cards if you miss your EMI payments. It affects your credit score which limits your access to these products. Moreover, banks may also decide to decrease your credit limit in case of missed payments.

ALSO READ: How To Manage Your Credit Card Bills Effectively

Tips to Avoid Missing Credit Card EMI Payments

It is easy to enjoy the advantages of credit card EMI payment. These are the things that you need to keep in mind:

• Rely on banks’ autopay feature for payments to be deducted automatically
• Set up reminders using apps like One Credit Card app to alert you close to a due date
• Track your expenses to ensure you always have sufficient funds in your account
• Use your credit card responsibly to make spend within your means
• Always pay your bills in full

Many credit card EMI payment benefits can make your purchase worth it. Credit cards like One Credit Card are a wonderful way to earn rewards on shopping and dining. It is crucial to pay your bills, EMI or not, on time to not have them drain your finances.