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Debit Card EMIs, a better option than Credit Cards

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We are slowly moving into the digital age, where all your transactions will be made electronically. For this reason, many banks and other Non-banking financial corporations have come up with some ingenious ways to make payments, one of the latest forms of online payments are Debit Card EMIs.

Debit Card EMIs are pretty simple, you use your Debit Card to make a purchase and the bank fronts the entire amount to the retailer so that you can receive the product immediately. After this, the bank will deduct the amount from your account through Equated Monthly Installments (EMIs). You can make purchases on EMIs with your Credit Card, but you require to sign up for a Credit Card in order to do this. The main advantage that Debit Card EMIs have over Credit Card EMIs is that you do not need to apply for a Credit Card and take on unnecessary debt.

Apart from online payment offers like Debit Card EMI on Flipkart and Amazon,there are a number of other reasons to reach for your Debit Card instead of your Credit Card when it comes to making purchases through EMI, here are a few.

No Additional Debt

When you take a Debit Card EMI, you do not take on any additional debt. Yes, the bank does pay the retailer on your behalf, but this is more like an overdraft than a loan. The bank will deduct the amount from your savings on a monthly basis. Credit Cards, on the other hand, draw credit on your behalf, this has added pressures and could come at quite a steep cost.

Interest Rates

Interest rates on Debit Card EMIs are usually quite nominal and there usually isn’t any processing fee attached to the transaction. The case with Credit Cards is a little different, Credit Cards usually have a very high-interest rate, yes, they usually do not charge you this interest if you make your payments within the stipulated time, but if you miss a payment there can be a number of charges that can make this debt go a little out of control. Credit Cards are instruments that have to be used very cautiously, and if you are not experienced with handling money these pieces of plastic can get you in quite a bit of trouble.

Balance out your Interest

Most banks provide you interest on your savings. So when you use your Debit Card for EMI purchases, the interest being earned by your savings account can help balance out the additional interest being charged on your purchase, in some cases, it can also nullify it. Credit Cards do not earn any interest any usually carry high-interest rates.

Earn Rewards

There are a number of rewards and discounts being offered to customers using a Debit Card EMI facility on shopping websites. You can save up points on your card and exchange them for products, movie tickets, travel, hotel books, etc. Debit Card EMIs also do not usually have a processing fee at the time of purchase, making them more economical than Credit Cards.

The next time you want to make a large purchase and want to pay for it through EMI, reaching for your Debit Card instead of your Credit Card may be a good idea and could save you a lot of trouble.

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Ethan Hunt

Bitcoin Maximalist and Toxic to our banking and monetary system. Separation of money and state is necessary just like the separation of religion and state in the past.

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