Purchasing big-ticket items with a credit card can strain your finances significantly. As a possible solution, a majority of credit card issuing authorities offer a special advantage known as the ‘Credit Card EMI’ facility. Using this facility, you can avoid paying for the entire amount at once and convert the purchase amount into small monthly instalments, i.e. Equated Monthly Instalments or EMIs. What’s more! Using the ‘Credit Card EMI’ facility, you get the chance to choose a suitable repayment tenor and clear the dues accordingly without straining your budget.
The credit card EMI facility lets you borrow funds on your credit card and pay for the items you wish to purchase. You can then decide on a repayment tenor during and pay back every month a portion of that amount and any other additional charges as EMI.
Let us understand with an example.
Suppose you wish to buy a high-end phone which is priced at ₹1 lakh. In case you can currently afford only ₹50,000 as the down payment, you can convert the remaining amount into easy EMIs with your credit card. Let us assume that the EMI tenor is 12 months and the rate of interest decided by the credit card issuer is 10%. Using a credit card EMI calculator, you can calculate that you will need to pay ₹4,396 monthly during the EMI tenor to clear your dues.
Thus, paying a small instalment of ₹4,396 could put less strain on your finances than paying the entire amount in one go.
There are primarily two ways of converting credit card (CC) bills into EMI. The first one is the Merchant EMI which enables you to convert your CC bill at the time of the purchase. Several banks have partnered with online shopping portals as well as retailers to make the EMI facility accessible to all. You can make a down payment with the funds available with you and the rest can be converted into EMIs by choosing a preferable tenor. Once processed, the repayment schedule would be sent to you by mail and the payable amount would reflect in your credit card statement.
Post-purchase EMI conversion is the second way to convert the credit card bill to EMI. Here, you can convert your credit card bills after the purchase by visiting the bank’s website, mobile app, or by calling their credit card customer care helpline number.
Step 1: Log into your credit card netbanking account.
Step 2: Go to the ‘Credit Cards’ section and select ‘Convert to EMI’.
Step 3: Choose the card and the transaction you wish to convert into EMI. Then, proceed to choose the transaction tenor, total amount, and the rate of interest.
Step 5: Click on ‘Submit’.
You can apply for ‘Credit Card EMI’ facility offline by calling the 24x7 helpline number of the credit card issuing bank or physically visiting the bank and submitting a written request.
Generally, banks offer the following credit card EMI options to their cardholders:
When you opt for the zero-interest-rate EMI (often referred to as no-cost EMI), you need not pay any extra interest rate on the purchase. Simply said, with a no-cost EMI credit card, you are only paying for the total price of the product and no extra finance charges.
In the case of an EMI on interest, you are charged at a lower range of 1.25%-1.99% monthly. Here, you have to ensure that you clear the dues at the earliest to reduce the interest component on your repayment amount. The longer the tenor, the higher will be the interest paid.
Note: Depending on the credit card issuer, the credit card EMI interest rates, processing charges, and other features and services will vary. It is advised to take into account all the fees and charges levied by your credit card issuer before opting for any of the above-mentioned credit card EMI options.
You can refer to the table given below to know the credit card EMI interest rates of top banks in India:
Bank |
Interest Rate |
Tenor |
SBI |
20% p.a. |
6 to 24 months |
Citi Bank |
Will be disclosed at the time availing credit card EMI facility |
6 to 48 months |
Kotak Mahindra Bank |
12%- 18% |
3 to 36 months |
HDFC Bank |
Will be disclosed at the time availing credit card EMI facility |
6 to 24 months |
Axis Bank |
1.5% p.m. (18% p.a.) |
6 to 24 months |
RBL Bank |
Will be disclosed at the time availing credit card EMI facility |
3 to 24 months |
Bank of Baroda (Instant EMI) |
13%- 15% |
3 to 24 months |
To calculate the credit card bill EMI, you need to take into account the fees and charges, such as interest rate and processing fees, levied by the bank. The credit card EMI would then be a product of the tenor, interest rate, processing charges, and the total amount left to repay. You can also take the help of an online credit card EMI calculator to calculate the amount you must pay when you convert your credit card bill into EMI.
Converting your credit card purchases into EMI has several advantages:
Interest Rate: The credit card EMI interest rate depends on the tenor you choose, i.e., shorter tenor implies lower interest rate, while longer tenor attracts a higher interest rate.
Reducing Interest Rate: While levying credit card EMI interest rate, issuing authorities follow the reducing balance method. To be precise, interest is charged at the end of every month on the loan balance. As you repay every month, the interest charges keep reducing and you end up paying less interest amount with every passing month.
Flexible Repayment Tenor: Most banks offer a convenient repayment tenor usually ranging between 3 and 24 months. The tenor is long enough to repay the amount without straining your finances.
Offer on Processing Fee: Banks introduce offers from time to time for specific periods where charges such as processing fee are reduced or waived off, which makes it ideal for saving more money.
Save on Foreclosure Charges: You can decide to close the credit card EMI process before the tenor has ended by paying a foreclosure charge, which may, in some cases, be waived off if you have a good rapport with the bank.
The credit card EMI conversion procedure attracts certain fees and charges which vary from bank to bank. Following are the details of such fees and charges levied against your credit card EMI.
Interest Rate: An EMI interest rate is charged on the credit card bill once converted into EMI which depends on several factors such as card type, your repayment history, your relationship with the bank, etc.
Processing Fee: A processing fee, ranging up to 3% of the total amount transacted, may be charged by the bank on the basis of your credit card type.
GST: 18% Goods and Services Tax will be levied on all fees and charges as a part of the government directive.
Foreclosure Charges: Closing the loan before the end of the tenor can attract up to 3% of the outstanding dues as foreclosure charges. Pro-rata interest charges can also be levied in such a case.
You can choose to convert your credit card purchase into EMI for a number of reasons such as to enjoy lower interest rate, select convenient repayment tenor, get offers on processing fee, and many more.
Some credit cards come with the EMI conversion facility. You must learn about the features and offers associated with your existing credit card before purchasing any products or apply for a new credit card that allows you to enjoy the credit card EMI conversion facility.
No, the EMI option is not cheaper than the regular credit card payments. If you opt for the credit card EMI conversion facility (except no-cost EMI), you have to pay an interest charge on the principal.
If you pay a certain amount in a month which is more than your EMI, the excess balance will be updated in the credit card statement and adjusted against the due balance in the following month.
Some credit card EMI is interest-free. However, in most of the cases, you have to pay a reduced interest rate on credit card EMIs.
Banks charge reduced interest rates on credit card EMIs, which is certainly lower than the finance charges imposed on the unpaid credit card balances. However, if you opt for EMI conversion facility on credit card, you are still required to pay additional interest charge on your credit card bill. Hence, you must decide all the associated costs before availing such service.
If the item is returned before the EMI conversion has been processed, the entire amount is refunded. However, if the EMI conversion has been processed before the item has been returned, the entire amount may not be returned to you and you might need to pay GST, interest, and preclosure charges. However, if you have applied for the option of no-cost EMI on credit card, no fees will be charged, and you would get the amount back in full.