Do Not Ignore Your EMI Scheme

By BankBazaar | May 10, 2012

Credit card companies offer their clients an option known as the extended credit option. With the help of this facility, a user is able to repay a share of his credit, by the end of his payment cycle, i.e., the date by which he gets his card statement. Then, he is able to make the rest of the payments in Equated Monthly Installments or EMIs, a scheme that is especially beneficial for people who have made big value purchases. However, users of this scheme need to be cautious while using this service as many complaints in this regard have surfaced. Several users had been witness to issues wherein users would be initially billed with a lesser amount, and the rest of the outstanding amount would automatically be converted into a loan, that had to be paid in installments. This is an unethical practice in many ways as the user is not informed about such an action beforehand, leading to a monarchical scheme by banks. And such loans are harmful to your finances as it can lead to faulty credit statements making it very difficult for you to borrow more credit in future if you require them to fund your financial requirements. In order to avoid such situations later, it is best to not enter into such transactions which can cost you a lot down the lane.

Banks however are quick to clarify their stance by stating that this was in fact a form of customer service as they were providing users with a scheme by which they get a deferred payment option, without any additional interest or charge levied on them. The “error” in such a transaction has been attributed to the organization that billed the user as they had done so without informing their client of such a transaction. There is also a possibility that they might have used the wrong EMI machine for the purpose of swiping the customer’s card. Although there aren’t many possibilities or chances for many cases of this sort to arise, users of this scheme must be wary by giving their statements a closer look. Chances are that their statements may show an error where they have been signed in for an EMI scheme that they never signed in for, even if it may not possess the burden of any charge at all.

While banks often make attempts to communicate such information to their customers by way of emails, phone calls, or websites, sometimes they include such offers without the permission of their clients in order to help them make payments towards large-ticket purchases in a simplified manner. Most public sector banks claim that as a part of their organizational policy, they inform customers about their EMI schemes at a time when they apply for a credit card itself. Also, while most banks may not charge any interest rates on their EMI schemes that are partnered with various merchant establishments, usually, EMI schemes include an interest rate as high as 2% per month, in accordance with the procedures specified by the bank.

In case you find yourself signed in to any EMI scheme without your approval, call the bank’s helpline number immediately, demanding for a reversal, which can often be performed by phone itself. If the bank’s refuse to take any action within a period of 1 month, then the aggrieved customers can address their grievances to a banking ombudsman. Make sure you notify the right authorities at the right time so that you can save whatever is rightfully yours. Also, if you feel there is a possibility for you to delay your purchase just in case you are short of the required finance, do it so that it can give you a great deal of financial discipline and stability over the years.

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