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Credit Card vs. EMI Card: What's Better

By Chanel Rick - Aug 10,2022
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From the moment salaries are credited into accounts, their fates are doomed. They say, “the heart wants what it wants,” which couldn’t be more accurate. The credited amount is split within a short period between recurring payments like EMIs, utility bills, salaries, etc. But that’s not all. By the time pay-day arrives, wishlists are overflowing with different desires. The heart continues to covet until the next paycheck arrives – even if the bank account is running on fumes! 

So, what do you do? Between numerous financial obligations, like paying off the essentials, there’s little to no room left for the occasional indulgence. While scouring the internet for viable solutions, you might come across different companies offering lucrative deals on credit cards or EMI cards. If you don’t already own one of these, choosing between the two might throw you off. 

Before applying for a credit card or EMI card, learn more about these payment options and their features. 

Credit Cards Vs. EMI Cards: The Difference 

The internet can answer most of your questions, but not without a fair bit of confusion. While searching for clarity on what the two cards offer, you might notice certain overlapping qualities. Aside from giving cardholders instant access to pre-approved funds, they serve various purposes and cater to different categories. 

Credit Card 

Referred to as “plastic money,” credit cards offer various benefits like interest-free periods, EMI options, joining gifts, cash backs, and more. While they charge a higher interest rate, avoid it with timely repayments. If users don’t clear the outstanding dues in full, they will be subject to late payment penalties and extra interest on the unpaid amount. 

Based on an individual’s lifestyle and preferences, they can opt for credit cards that offer benefits for specific categories. These include flyer miles, airport lounge access, dining or cinema rewards, etc. However, practising some discipline is essential to avoid attracting interest penalties or a lowered credit score. 

EMI Cards 

Often mistaken for a credit card, this payment option allows users to purchase small-and-big-ticket items via EMIs. Cardholders are allotted a pre-approved amount based on their applications and repayment capacity, which can be used to make online and offline purchases. Certain EMI cards allow you to purchase products without needing to pay interest on the amount. 

Moreover, EMI cards allow users to foreclose outstanding dues without penalty fees. As long as all EMI repayments are fulfilled, you can continue to use its features for self-indulgences. 

The Bottom Line? 

Credit cards and EMI cards offer users the benefit of purchasing items by converting the transaction into an EMI. However, that doesn’t necessarily make one better than the other! Based on your financial requirements or lifestyle, opt for the one that aligns with your interest. 

For better clarity on the matter, let’s explore both the options for the different payment experiences they offer. 

Compare the Different Payment Experiences

The best way to determine which card type suits you best is to narrow down the different expenses they will be used to finance. Do you want a card for uninterrupted shopping sprees? Or, perhaps, you’re a connoisseur of good food and times? Based on your answers to those questions, choose between a credit card or an EMI card. 

That said, another factor to consider is the payment experience. While both the cards offer the EMI option, they come with their terms and conditions. Let’s understand how they both work via the following two examples. 

Example #1: Converting e-commerce transactions into credit card EMIs

Merchant EMI offers, available at stores and online portals, are based on tie-ups between manufacturers and credit card companies. Through this arrangement, interest rates are pre-determined without much consideration to whom they’re offered. Usually, customers are subject to the same interest rates without many exceptions. 

The processing fees and interest rates are charged against the online price in this case. Based on this, customers can either convert the payment into affordable EMIs or complete the repayment during the next billing cycle. 

Example #2: Converting payments into EMIs during the purchase 

Unlike the previous option, EMI cards solely allow payments on an instalment basis. However, it gives users the flexibility to choose between short-and-long-term tenures. Depending on the feasibility of these tenures, cardholders can complete the purchase and repay the amount over a preferred tenure. 

Certain EMI cards also offer customers no-cost EMIs that don’t impose any interest rate on the amount used. 

The next time a situation arises that requires you to decide between credit cards or EMI cards, think carefully! While they serve similar purposes of providing access to funds, they couldn’t be more different. Credit cards are a lucrative option for individuals who want additional benefits like rewards, cash backs, and other bonus points. In contrast, EMI cards are a great alternative to credit cards if you plan to limit their use to financing purchases. 

Whether you’re on team credit cards or team EMI cards, we have a simple solution for you. Visit Bajaj MARKETS and find out which of the two works best for you – apply for credit cards or an EMI card today! 

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Bajaj Finserv Direct Limited ("BFDL") is primarily engaged in distribution of financial products and services through its digital platform (“Bajaj Finserv MARKETS”) and inter alia renders services of customer acquisition, providing preliminary credit support activities, fulfilment services and post-acquisition customer services to Banks, NBFCs, HFCs. BFDL is also a registered Corporate Agent (Composite) under valid IRDAI registration number: CA0551 valid till 10-Apr-2024 for solicitation and servicing of Insurance Products. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522