If you’re one of the many people who still pay your credit card bills via EMI, you may be in for a big surprise. This outdated payment method is not only a waste of money, but it’s also putting your finances at risk. Here’s why you should switch to a more modern payment method, and how AI-powered software can help make the transition as smooth as possible.
What is EMI?
EMI stands for electronic money order. It’s a way to pay for goods and services by transferring money electronically from your bank account. The good news is that EMI is becoming more and more common, so you’re likely to be able to use it even if your bank doesn’t offer it. The bad news is that EMI is usually a huge waste of money.
There are two main reasons why EMI is a waste of money: first, you’re almost always getting charged interest on your EMI balance, and second, there’s a chance that the goods or services you’re buying won’t actually arrive as promised. Let’s take a closer look at each of these issues.
EMI Interest Charges
One of the biggest problems with using EMI is that you’re almost always getting charged interest on your balance. This means that over time, EMI can become quite expensive. For example, if you have an EMI balance of $100 and you’m currently being charged interest of 8% per month, in just over a year your balance will be $118 (8 x $100 = $108). That’s a lot of money!
It’s also important to remember that not
What are the Pros and Cons of Paying Credit Card via EMI?
Paying your credit card via EMI is a huge waste of money. Here are the pros and cons of this payment method:
PROS
-You don’t have to carry any cash with you.
-You can pay your credit card bills online or at the bank.
-EMI payments are usually processed faster than payments made using other methods.
CONS
-You may end up paying more interest on your credit card debt if you pay via EMI.
-EMI payments can often result in higher fees charged by the credit card company.
How to Avoid Paying Too Much Money When Using EMI?
EMI is an easy and convenient way to pay your credit card bill, but it’s also a huge waste of money. Here are 5 ways to avoid paying too much when using EMI:
1. Compare interest rates before you commit to using EMI. Credit card companies offer different interest rates on EMI payments, so make sure you understand the costs involved before signing up.
2. Don’t use EMI if you can avoid it. If you can pay your credit card bill in full each month, do so. This will save you money on interest charges and allow you to build up your credit history.
3. Wait until your bill is due before using EMI. This will add a few days to the processing time for your EMI payment, but it will also minimize the amount of interest that will be added to your balance.
4. Only use EMI if you absolutely have to. If there’s any way possible that you can pay your bill in full ahead of time, do so. This will reduce the amount of interest that you’ll have to pay and could even result in a lower overall cost of borrowing money.
5. Use online calculators to figure out
Conclusion
I suppose it makes sense to pay your credit card bills by using a direct debit because it’s more convenient. But is that really the best financial decision? Depending on your spending habits, you could be wasting hundreds of pounds in interest fees every year! Here are four reasons why paying via EMI is a huge waste of money:
1) You will incur interest on the outstanding balance from the day you make the payment. This can be as high as 22%.
2) The IRS considers any payments made via EMI to be taxable income, which means you will have to include it in your annual tax return.
3) If there is an emergency and you cannot make a regular payment, you might find yourself unable to get loans or borrow against your property – both of which would mean economic hardship.
4) Direct debiting leaves a negative impact on your credit score – meaning that lenders will be less likely to offer you finance in future. So what