The decision to close a credit card with outstanding Equated Monthly Installments (EMIs) may seem straightforward, but it comes with hidden charges and rules that Indian retail investors need to be aware of. According to experts, cancelling a credit card with EMI does not erase repayment obligations, leaving borrowers with outstanding dues. This can negatively impact credit scores, making it harder to secure loans or credit cards in the future.
The Indian banking sector has witnessed a significant increase in credit card usage in recent years, with the total number of credit cards issued reaching over 60 million in 2022. 5 lakh crore in 2022. For borrowers who choose to close their credit card accounts, it's essential to understand the implications of doing so.
Foreclosure charges, interest rates, and pending dues are just a few aspects that borrowers need to consider before making a decision. By understanding the rules and charges associated with closing a credit card with EMI, Indian retail investors can make informed decisions about their financial obligations and avoid any potential pitfalls.