Convert Your Credit Card Bills to EMI – Easy & Flexible

Advantages of Credit Card EMI

The following is the list of advantages of EMI facility of credit cards:

1. Ensures savings on repayment period as the EMIs on credit cards charges 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 the credit card purchase into EMI and check the bank policy if the fees can be waived off.
4. Reducing balance method is used to calculate the interest charged on EMI and the interest 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.

How Does EMI on Credit Card Work?

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.

How do EMIs Affect your Credit Card?

The following are the effects of EMIs scheme on your credit card:

1. Credit limit is reduced by the bank by the EMI amount.
2. The EMI amount increases the monthly payment due
3. The cardholder will need to settle the outstanding balance along with the EMI amount each month

How to Convert Credit Card Payments into EMIs?

The following are the steps to convert credit card payments into EMIs:

1. 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 EMI.
3. For the convenience of the customers for managing payments retailers encourage 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.
6. Factors considered for eligibility for the EMI are:
   1. Credit score
   2. Spending habits
   3. Monthly bills
   4. Repayment schedules

Types of EMI Option by Credit Card

The following are the two main types of credit card EMI options:

• No-cost EMIs:
  • Option of zero-interest rate EMI
  • Small processing fees are charged by some of the credit cards
  • Interest-free loan is offered by the credit card
  • Choosing the EMI option to pay credit card bills is ideal for those who wish to pay the bill in installments
• Low-cost EMIs:
  • Reduced or low-interest rates EMI option
  • Per month the interest rates range from 1.25% to 1.99%
  • The interest rates for defaulters or late payments are more than interest rate on credit card EMIs
  • In addition to the interest charged, a processing fee is also charged by the credit card providers.

Interest Rates by Top Banks

Steps to Convert Credit Card Bills to EMIs

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. Additionally, customers can utilize a portion of the available funds as a downpayment.
2. 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.
3. 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.

When should you consider taking EMI on Credit Cards?

Here are the details about when should the credit card user consider taking EMI on credit cards:

Two Situations for EMI on Credit Cards:

1. 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.

1. Scenario 2: To manage debt effectively, transactions can be converted into EMIs within 30 days if users overspend.

Making the Most of EMI on Call:

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 jewelry purchases, the EMI on Call facility from ICICI Bank is not applicable.
5. Transactions cannot be converted into EMIs if they are older than 30 days.

Points to note about EMI schemes when you apply for a Credit Card

Here are some of the points to remember about EMI scheme while applying for 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.

How to Calculate EMI on Credit Card Bill

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.

EMI substitutes for credit card

If you have a large outstanding balance which will take a few months to be repaid, then it is recommended you consider availing a personal loan at a lower interest rate to clear your EMIs.  

However, if you have a good relationship with the bank and have a positive track record, then the lender may consider lowering your credit card to EMI interest rate. 

Things to Keep in Mind While Opting for an EMI on Credit Cards

The following are the points that should be remembered while opting for EMI on credit Cards:

1. Check EMI availability of your credit card before making a purchase
2. Credit Limit of 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.

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