May 21, 2025 · 10 mins read
Santosh Kumar
If you have a credit card bill that you cannot afford to pay in one go, converting your bill into an EMI means dividing the total due amount into smaller, fixed monthly instalments over a pre-defined tenure. This option is usually available for purchases exceeding a certain amount, and the EMI attracts an interest rate and processing fees. The EMI conversion helps better handle high-value payments as it relieves the immediate financial burden. One of the most prominent advantages of credit cards is that the purchase amount can be broken into smaller instalments for a bill exceeding Rs . 10,000. With this facility, the cardholders can pay the selected amount at a specific time instead of paying the entire amount at once.
1: This ensures savings on the repayment period, as the EMIs on credit cards charge lower interest rates than standard credit card interest rates.
2: Purchases can be converted into EMIs by choosing repayment tenure from six months to two years.
3: Some banks charge a nominal fee for converting a credit card purchase into an EMI. Check the bank policy to see if the fees can be waived.
4: The Reducing balance method calculates the interest charged on EMI and is applied to the remaining balance at the end of the month.
5: Foreclosure or cancellation facility is offered by the credit card EMI option, thereby allowing users to pay the remaining amount in advance to save the interest charged.
EMI on credit cards works in a simple way. If you are purchasing a product which is more than Rs.10,000, for example, an electronic appliance, furniture, vehicles, etc. You can convert it to an EMI.
The EMI will be calculated depending on the rate of interest charged by the bank, the tenure you choose and the down payment which you provide.
If for example, you have purchased a phone worth Rs.20,000 and pay Rs.10,000 as a down payment. The rest Rs.10,000 can be paid as EMIs for a period of 1 year with an interest of 12%. The EMI you will need to pay for 12 months will be Rs . 1,200.
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The following are the steps to convert credit card payments into EMIs:
1: The EMI payment option can be chosen during the time of purchase by the customers.
2: Partial payment of the credit card bill amount can be done by converting the amount into an EMI.
3: For the convenience of the customers for managing payments retailers encourage the EMI facility.
4: Based on your credit card bill and monthly statements interest rate is charged accordingly.
5: The eligibility of the customer for the EMI facility is determined by the bank.
Factors considered for eligibility for the EMI are:
1: Credit score
2: Spending habits
3: Monthly bills
4: Repayment schedules
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Interest Rate – It must be noted that banks charge interest on the credit card bill amount that gets converted into EMIs. The credit card interest rate, however, varies from bank to bank. It depends on various factors such as the down payment amount, repayment tenure, etc. The shorter the tenure, the lesser the rate of interest and vice versa. So, it is better to repay the loan amount as soon as possible!
Reducing Balance Method – Mostly, banks charge interest on the EMI amount using the reducing balance method. This means that the interest will be charged on the remaining loan balance at the end of every month. So, for instance, if you have a loan of Rs. 50,000 and you have paid Rs. 10,000 in the first month, the interest in the next month will be charged on the remaining amount of Rs. 40,000. In this way, the interest amount that you have to pay reduces every month.
Repayment Tenure – You can choose a repayment tenure anywhere between 6 months and 2 years. However, it is important to note that the shorter the repayment tenure, the lesser the amount of interest to be paid.
Processing Fee – Some banks charge a minimal processing fee on converting the credit amount into EMIs while others do not charge any such fee. Usually, it is during the festive season, when banks waive off this processing fee, so you can make your purchases during that time.
Foreclosure and Cancellation – In case you manage to accumulate the pending loan amount, you can repay it before your repayment tenure ends. This refers to foreclosure or cancellation of your loan. However, in such cases, various banks may charge a minimal foreclosure fee while others may not.
1: Option of zero-interest rate EMI
2: Small processing fees are charged by some credit cards
3: An interest-free loan is offered by the credit card
4: Choosing the EMI option to pay credit card bills is ideal for those who wish to pay the bill in instalments
1: Reduced or low-interest rates EMI option
2: Per month, the interest rates range from 1.25% to 1.99%
3: The interest rates for defaulters or late payments are more than the interest rate on credit card EMIs
4: In addition to the interest charged, a processing fee is also charged by the credit card providers.
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The steps to convert your credit card bills to EMIs are given below:
1: Customers are provided with the flexibility to convert their credit card dues into EMIs at the time of purchase. This option is particularly useful when customers may not have the full amount available upfront, allowing them to spread payments over time.
2: Additionally, customers can utilize a portion of the available funds as a down payment.
3: Retailers often promote the EMI facility to customers, as it offers greater convenience during payments. The interest rate applied to EMIs is determined based on the total bill and the monthly statement of the credit card.
4: To qualify for the EMI option offered by the issuing bank, customers must meet certain eligibility criteria set by the bank. Factors such as credit score, spending patterns, monthly bills, and repayment history are assessed to determine eligibility for the EMI facility.
Here are the details about when the credit card user should consider taking EMI on credit cards:
Scenario 1: Use EMI for high-end purchases, such as:
1: Smartphones
2: Laptops
3: Designer suits
The EMI option can be opted for in case your bank balance is insufficient. EMI enables immediate purchase without waiting.
Scenario 2: To manage debt effectively, transactions can be converted into EMIs within 30 days if users overspend.
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1: Transactions can be converted into EMIs instantly via Internet Banking, iMobile Pay, or ICICI Bank Customer Care for transactions of Rs.1,500 and above.
2: Under the 'EMI on Call' facility, transactions of Rs . 3000 and more can be converted using the OTP page.
3: Every month, along with an interest rate of 1.33%, a processing fee of 2.00% of the transaction value is also added.
4: For gold, fuel, and jewellery purchases, the EMI on the Call facility from ICICI Bank is not applicable.
5: Transactions cannot be converted into EMIs if they are older than 30 days.
Here are some of the points to remember about the EMI scheme while applying for a credit card:
1: Based on factors such as repayment tenure, interest rate, and down payment, EMIs are calculated
2: In the monthly Credit Card Statement, the EMIs on a credit card can be included.
You can calculate the EMI on your credit card bill with a record of the interest rate and processing fee which is decided by your bank.
The EMI will be calculated based on the remainder of the total purchase amount multiplied by the interest rate and tenure, and processing charges.
If you wish to check the EMI which you need to pay, you can refer to the EMI Calculator on the website to get an accurate figure depending on your purchase amount, interest and processing fee.
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The following are the points that should be remembered while opting for EMI on credit Cards:
1: Check the EMI availability of your credit card before making a purchase
2: The Credit Limit of a credit card gets reduced by the principal amount of the purchase on using EMI
3: Negotiable processing fees charged by the banks for EMIs are negotiable or can be waived based on loyalty and repayment history.
4: Online purchase benefits offered by retailers as EMI options that comes deals and discounts, by waiving off retail commissions.
5: Prepayment penalty waiver comes with EMI schemes, which can also be waived sometimes.
6: To avoid high interest and penalties, full payment of credit card bills is important.
1. No immediate negative impact: Converting your credit card dues to an EMI does not directly affect your credit score. This is good for your credit profile because the lender considers it a planned repayment strategy.
2. Positive impact with timely payments: Timely EMI payments can also help you keep or even increase your credit score over time. This will improve your creditworthiness and help your chances of getting approvals on your future borrowings.
3. Utilisation ratio concerns: A critical component of your credit score is credit utilisation ratio. Converting your bill into EMIs doesn’t help you lower your utilisation ratio right away because the outstanding amount still counts towards your credit usage. If your utilisation has been consistently high, it can affect your score negatively.
4. Missed payments and their potential risks: Missed or delayed repayments of your EMI can hurt your credit score badly. Financial instability negatively impacts the repayment history, which is one of the most important components of your credit score.
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There are many reasons to do this, a few being no processing fee and reduced interest rate.
Your EMI will be determined based on the remainder of your total amount of purchase multiplied by the rate of interest, tenure, and also the processing charges.
No, not all credit cards come with the facility of EMI.
The rate of interest for EMI on HDFC credit cards is 1.5% per month (9 months to 3 years).
No, you must keep in mind that the regular credit card payment is ideally the best. Credit card EMI conversions will charge interest.
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