Need to Know About Credit Card EMIs

How Credit Card EMI Works In India

All you need to know about credit card emi

Planning to buy something expensive but facing funds crunch at the current moment? This is the key concept of how credit cards work. It is a card that is issued by banks to its customers which allows them the option of buy now, pay later. You can make a purchase according to the purchasing power given by the bank and make the payments later according to the cycle, or you can also pay the loaned amount in the form of an EMI. But is paying the loan amount in EMI a good option?

In this article, we will understand how credit card EMI works and what are some of the things that need to be kept in mind while making a purchase with the help of a credit card.

Some of the banks offer their customers the option to convert their payments into EMI - Equated Monthly Instalments, which is an option to pay the amount in small portions each month. It helps in saving us from the pressure that can be felt while paying the amount all at once. There are some factors that must be kept in account while we are dealing with the answers to the question - of how credit card EMI works.


While you opt for the EMI option, the tenure to pay the amount is somewhere between three months to eighteen months. It is the time within which you can complete your payments as per the plan chosen by you.


Looking for a good bargain? There are some banks that offer no cost EMI and some other banks charge EMIs per se if you chose a plan for 6 months, 9 months or so forth. Look into the interest rates, research, and then opt for an EMI option.

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Processing fee

Some of the banks charge a small amount while converting your payments into EMI, termed as processing fees and some of the banks in the system offer no such cost to convert your amount into EMI.

You must choose the bank that best suits your needs.

Available credit

Look into the available credit or understand it better the purchasing power of your credit card. It must be either less or equal to the amount you have to pay as EMI, or else your request for EMI will be rejected. This is one of the ways how credit card EMI works in India.

Reduction of credit limit

Also known as a temporary reduction of the credit limit. As soon as we opt for an EMI option the bank blocks the amount for which we have sent an EMI. The bank starts increasing the credit limit with a sum of the amount each time you make a payment.

Foreclosure & cancellation

In this case, if you accumulate the pending amount and you wish to repay the amount before the tenure ends, you can do so. In this case, too some banks charge a small amount for cancellation and some simply close the EMI period.

Does credit card emi impact credit score?

Opting for the EMI plan will have no negative impact whatsoever on your credit score but missing any EMI payment negatively affects your score. Hence, while the buy now, pay later opportunity is considered easy and convenient, defaulting on your payment cycle will affect your credit score the same way any other delayed credit payment will. You must also know how EMI is deducted from your credit card for the safety of your funds and to ensure that you do not miss your EMI payment dates.

How to convert credit card payments to emi

Your bill can be converted into EMIs in one of two ways. You have two options for turning your purchase into an EMI: either at the time of purchase or after paying off any outstanding balance.

Merchants provide EMI alternatives on credit cards for the majority of expensive goods. Make careful to inquire about EMI possibilities with your merchant or vendor before making a significant purchase.

You can choose smart EMI choices for credit cards by connecting to your savings account through net banking and deciding to convert your outstanding debt into EMIs. You can also go to the nearest branch and ask a bank representative to help convert your remaining debt into EMIs. Your eligibility for smart EMIs is determined by your credit score, this is how credit card EMI works in different banks of the country.

What you need to keep in mind when converting to emi

Some things must be considered while you look for EMI options. If an individual is looking for an EMI option that is for more than three months to repay the outstanding, opt for EMIs. If an individual needs an EMI option for less than three months, the person should avoid EMIs, as rotating credit can multiply your debt at a fast pace. Also, look for different options to fund your purchase.

Final words

While it is comfortable to get your credit card bills converted into EMIs, it is also essential to evaluate the different aspects that have a significant part in changing your credit card statements into EMIs. If you plan to go for an EMI purchase on your credit card, make sure to loan the amount for a short span. A credit card EMI calculator can also play a significant role if you wish to select the maximum amount you can afford to spend on your credit card.