Credit cards are uniquely designed payment instruments that work on the principle of ‘buy now, pay later.’ You can make online or offline payments up to a predefined credit limit on your card. You can make as many payments as you want as long as you have the credit limit on your card. You have an interest-free period to make bill payments without a burden. You get various perks and benefits, plenty of cashback offers, and reward programs on the best credit cards

And the favours of a credit card do not end here. Mostly you use a Credit card for Cox bill pay, So Credit cards offer conversion to EMIs. If you are going through a particularly troublesome month, you can convert your credit card purchases into easy interest-free Equated Monthly Instalments (EMIs). It is like a short-term loan, which you can repay in small amounts EMIs. 

How Does EMI on Credit Cards Work? 

The EMI conversion of a credit card bill or purchase into a loan can be returned over a period as per your convenience on a piecemeal basis. The total transaction amount or credit card dues are divided into equal small instalments that the consumer can pay conveniently. 

The amount to be paid for each installment is calculated based on the purchase or bill amount and the interest rate applicable on EMIs. They charge a higher interest rate for a long tenure of the loan. Suppose there are two options, six months EMI and 12-month EMI. The interest on the six-month EMI option will be much lower than the interest on a 12-month EMI option. 

Many commercial banks also facilitate their clients with no-cost credit card EMIs. It means there will be no interest added to the borrowing to repay.

The Process – Convert Credit Card Bill into EMIs.

It is an easy process to avail of the EMIs on credit cards. You can avail of Merchant EMI at the time of purchase or convert your credit card bill. 

  • Merchant EMI: Most banks offer credit cards that are linked to merchants’ shopping portals and e-commerce platforms. Consumers can opt for the EMI facility while making a purchase. They may be required to pay a down payment with their funds, and the remaining can be converted into EMIs with a preferable tenure, say six months. Once it is verified and processed by the bank, consumers will receive a repayment schedule by mail. The amount payable every month will be reflected in your credit card statement.

You should note that once you have made a purchase on your credit card and choose an EMI option, still the entire amount (not just EMI) will be deducted from your credit limit. For example, If your credit card limit is Rs.70,000 and you make a purchase for Rs.30,000 with an EMI of Rs.5,000. At the end of shopping, your credit card limit will become Rs.40,000. As you keep paying the credit card EMIs, your credit limit will continue to refill. 

  • Credit Card Bill EMI: Another option is converting the credit card bill to EMI. You can visit the bank’s official website or app and log in to your account via internet banking ID to convert the bill into EMI. You can call the bank’s credit card helpline number also to convert the amount into EMIs. Also, you can visit the bank branch physically and submit a written request.

This way, the outstanding amount on the credit card statement can be split into easy EMIs conveniently so that your finances or credit limit does not get strained. A few renowned banks allow you to opt for a tenure of 3-48 months. They provide an EMI calculator to determine how much EMI you will require to pay during the preferred tenure.

Who can Convert Credit Purchases or Bills into EMIs?

Every card holder is not eligible to convert their purchases or outstanding into EMIs. Banks check your eligibility for EMIs and then approve your request. Usually, an individual with a good credit score can avail of the EMI facility on the credit card. You can log in to your account and check your eligibility in the credit card option.
Thus, whether it’s an emergency, a cash crunch, or an unpredictable month for business persons or self-employed individuals, EMI conversion of credit card purchases offers you greater flexibility with a convenient repayment tenor. Do not freak out due to the burden of the entire credit card payment in a single month. Make urgent purchases and pay EMI to pay the total amount due in easy instalments later.

By Manali