Can UPI credit card payments be converted into EMI later?

Many individuals have been curious to know if they could convert their UPI Credit Card payments into EMIs at a later point in time, especially since many people are now utilising UPI for their daily and high-value transactions. Since a user utilises their credit card as the funding source, when utilising UPI for making the purchase, it denotes to the credit institution that the user is using the Credit Card to make the purchase, and the money is being transferred via UPI. Therefore, how you utilise the UPI payment system is unique, and you should consider this when thinking about whether to use a UPI Credit Card payment to convert into EMIs.

Although you may have the ability to convert your UPI Credit Card payments to EMIs, this is contingent on the rules and regulations of your Credit Card Company and the way the transaction occurs. Some Financial Institutions will allow for post-transaction EMI conversion for valid purchases regardless of how the payment was processed (via UPI, Swipe Machine, or Online Gateway). While other Banks will restrict the EMI conversion to specific Merchant Categories or Minimum Purchase Amounts.

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When you charge your UPI payment to your credit card, the amount charged will show up on your credit card statement as part of your total outstanding balance. To the bank, the payment is just a normal card transaction, and they process it appropriately. If your card issuer supports converting a transaction into monthly instalments (referred to as "EMI"), you can usually do so from the app/website of the card issuer or through your customer service representative. Generally speaking, most issuers have limitations on the types of transactions that can be converted into EMIs.

It is crucial to be aware that not every UPI payment will be eligible to be converted into an EMI. Some transactions may be classified by the issuing bank as low-value payments or payments made for utilities, or may be considered cash-like transactions (which typically would not qualify for EMI conversion). The manner in which a merchant is classified by the bank (merchants are assigned different classifications by different banks) is critical in determining whether or not the transaction qualifies for EMI conversion. Even if you successfully made a payment to the merchant, if the bank classifies the payment as ineligible, the bank will not offer EMI conversion on the transaction.

Also Read: Virtual RuPay Cards: Using UPI without Bank Account

Another important issue to consider when evaluating the cost of an EMI conversion is that many EMI conversions are not free. In some cases, the EMI conversion may be advertised as "no-cost EMI," but generally, in those cases, the processing fee is included in the instalment amount, or the interest rate on the instalments may be modified. If you choose to make payments over time using an EMI plan, you will incur additional costs related to the interest charged on your balance. Similar to other credit card accounts, these same principles also apply to UPI card payments.

Also Read: How to Transfer Money From Phonepe Wallet to Bank Account

If you have an FD (fixed deposit)-secured credit card, the rules for converting transactions into EMIs generally do not differ. Your FD only serves as security/collateral for your credit card and does not give you automatic access to payment plans or restrict your access to a credit plan. Eligibility for payment plans is based on how the credit card issuer has set its own policies and not on whether the credit card is secured.

Being informed about these areas can protect you from confusion and unexpected expenses. Understanding how credit feature offers, such as the instalment option and long-term impact, work helps eliminate confusion for users. An example of this would be ZETAPP, which is a platform that focuses on helping consumers understand how credit card products will work and the impact that using a particular product will have on their overall credit rating long-term.

Also Read: Which Credit Card Offers Fuel Cashback in India?

FAQs

Are all UPI credit card payments eligible for EMI conversion?

You cannot determine whether or not a payment made using a credit card will qualify for conversion into an EMI. Conversely, whether or not you can convert a UPI payment made with credit cards will depend on your bank and the categorisation of the payment being made.

Is EMI conversion free for UPI credit card transactions?

There are not often any costs associated with converting UPI payments into No Cost EMIs. It is important to note that there may be costs associated with processing or incidental charges when using No Cost EMIs.

Can I convert a UPI credit card payment into EMI after the statement is generated?

Many banks will allow this, though to do so will typically require customers to convert their payment to EMI immediately following making a purchase.