Everything You Need to Know About Credit Card EMI


Once you learn how to use one responsibly, a credit card may be a great financial resource. Credit card schemes provide you with the freedom to make large purchases in preparation for future events, and then pay for them over time with manageable monthly instalments. 

Once the sum is converted into EMI, the outstanding balance is repaid monthly, much like a loan. Credit card issuers often allow customers a repayment duration of anywhere from three months to three In this.

In this article, we’ll talk about credit card EMIs.

What Are Credit Card EMIs?

There has never been a more convenient time to use a credit card for cashless transactions, what with the widespread adoption of digital payment methods. Your credit card debt can be converted into an EMI the same way a personal loan can.

For people who can’t afford to pay off their credit card balances in full, the option of making payments in instalments over time is a good compromise. It’s also a good option for debtors who would rather pay down a portion of their debt now and let the remainder accrue interest.

How Does Credit Card EMI Work?

One perk of availing of a credit card scheme is the grace period. This is typically 45-55 days but varies between different financial institutions. It allows you to pay off your purchases without paying interest. The statement period (or billing cycle) is when interest is not charged, starting on the first day of the period and ending 15-25 days following the last day of the statement period.

However, when making a sizable purchase, it may be outside of most people’s financial means to make a full repayment within the interest-free grace period. Banks respond to this need by providing credit card EMIs.

EMI programs are typically issued in conjunction with a retailer or supplier. A minimum purchase requirement is typically in place before you can use a credit card’s EMI program.

If you choose the credit card EMI plan, you’ll be able to spread out your payments over 3, 6, 9, 12, or 24 equal monthly payments. Each bank’s interest rate for the Credit Card EMI program is different.

How to Convert Credit Card Payments to EMI?

Users can choose to divide their credit card charge into monthly instalments at the time of purchase if they so choose. If you have enough cash on hand to make a down payment, you can do so, and the rest of the price can be paid in instalments over time.

Well, it’s worth noting that it’s not just up to the credit card holder to decide whether or not to repay the credit amount in instalments. The credit card issuer/bank has considerable say over whether a customer can pay down their balances via instalment payments.

Paying off a credit card balance is similar to paying back a bank loan. The bank will lend you the money you need to pay off your credit card balance, and you can make your payments in instalments that best suit your budget. 

In order for the bank to extend credit to you, it must be certain that you will repay the money on time and not abuse the privilege. Before deciding whether or not to convert your credit card payments to EMIs, banks will look at your credit score, credit repayment history, other loans you may have, etc.

Factors to Consider While Converting Your Credit Card Bills into EMIs

Here are some things to think about before deciding to turn your credit card payments into EMIs:

Reducing Balance Method

Interest on the EMI amount is often calculated using the diminishing balance approach by banks. Therefore, interest will be added to the unpaid loan sum on the last day of each month. 

If you borrowed Rs. 50,000 and paid off Rs. 10,000 in the first month, the interest you pay the following month would be calculated based on the remaining Rs. 40,000. In this manner, your monthly interest payment will gradually decrease.

Rate of Interest

It’s important to keep in mind the interest that a bank will tack onto your credit card statement when you pay it off in instalments. Interest rates on credit cards, however, differ between financial institutions. 

The down payment, length of payments, interest rate, and other variables all play a role. Generally speaking, the interest rate will be lower for a shorter-term loan. Therefore, the loan amount should be repaid as quickly as possible.

Processing Fee

Some financial institutions may impose a nominal fee for transforming a credit sum into EMIs, while others may not charge any fee at all. During the holiday season, many banks reduce or eliminate this processing cost, making it easier to shop.

Period of Repayment

The length of time you have to pay back the loan is flexible, falling between 6 months and 2 years. In any case, it’s worth noting that the interest rate will be lower if the repayment period is shorter.

Termination and Foreclosure

In the event that you are successful in accumulating the outstanding loan amount, you will be able to repay the loan before the end of the period during which you are required to make repayments. Your loan may be foreclosed upon or cancelled. However, in such circumstances, different banks may charge a minor foreclosure fee while others may not.

Tips To Make Credit Card EMIs Work For You

Go with a shorter term

The larger the loan term, the larger the interest payment will be. The minimal term should be one in which you can afford to make the payments.

Be cautious

During the holiday season, several credit cards waive the processing fees associated with the EMI option. Make use of it.

Read the terms and conditions properly

Any of the cards do not impose prepayment penalties. Prior to making a final decision, it is important to learn about the pre-closing terms and circumstances.

Feel free to inquire

It’s possible that during the holiday season if you choose easy EMI credit cards, you won’t be eligible for in-store cash savings. Many stores provide discounts on things bought straight up by cash/card only. But if you ask for discounts, you might be in luck because the holiday season is a time of goodwill and generosity.

Don’t default

If you choose the EMI option with your credit card, be sure you pay on time every time. Your credit score will take a hit if you don’t pay your EMI on time every month.


Though it’s simple to have your credit card payments restructured as instalment payments, there are several issues to think about before making the switch. First and foremost, you should know that not all credit card issuers provide EMI instalments and that not all credit card customers would qualify for it. 

If you must use your credit card for an EMI purchase, make the loan for the shortest possible duration. If you want to know how much you can afford to charge on your credit card, an EMI calculator will be very useful.

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