Credit cards play a vital role in the life of the contemporary person, being beneficial in many ways. They are useful whether it is paying an urgent bill, a medical emergency, or buying a product.
But do you know what a credit card EMI is? Let’s try to understand that here!
A popular benefit of credit cards is the EMI (Equated Monthly Installment) option. With this feature, customers can make transactions using their credit cards and spread the payments over several months in equal installments.
This makes it easier to manage larger expenses without paying the full amount upfront. Instead of a one-time payment, you can break it down into smaller, more manageable amounts, making it more affordable and helping to keep your budget on track.
The credit card EMI option simplifies payment management, making it more convenient for customers to afford their desired products.
Here’s what you need to know about how credit card EMI works when you apply for it -
Calculation of EMIs: The EMIs depend on several factors, including the rate of interest imposed by the bank, the tenure established for the loan repayment, and deposits made by the borrower in case of loans with down payments.
Monthly Charges: EMI on a credit card is a component that is levied on the credit card statement every month.
There are typically two situations where opting for EMI on credit cards is a good idea:
Scenario 1: If you can't afford an item or service at the moment, the EMI facility on credit cards is a lifesaver. Instead of waiting for prices to drop or hunting for better deals, you can make the purchase right away and pay in manageable monthly installments.
Scenario 2: If you've maxed out your monthly spending limit, the EMI option can still come to your rescue. As long as the transaction is made within 30 days, you can spread the payment over several months. This allows you to manage your credit more effectively without putting too much strain on your budget.
Here's how you can convert your credit card payment to EMI -
Check Eligibility: Ensure your transaction is eligible for EMI conversion.
Select Transaction: Choose the transaction you want to convert to EMI.
Choose Tenure: Select the EMI tenure (number of months) that suits you.
Confirm and Authenticate: Confirm the conversion and authenticate with OTP if required.
Review Charges: Be aware of any interest rates and processing fees associated with the EMI.
EMI is deducted from your credit card as follows -
Monthly Billing: Each month, an EMI amount is added to your credit card bill.
Minimum Payment: The EMI is included in the minimum payment due.
Interest and Principal: Each EMI includes both interest and principal repayment.
Automatic Deduction: The EMI is automatically deducted when you pay your credit card bill.
To fully utilize the EMI on Call facility on your credit card, keep the following points in mind -
You can turn transactions of Rs.1,500 or more into easy EMIs using your mobile banking applications, internet banking, or customer care.
The OTP page of the 'EMI on Call' indicates how you can choose to convert transactions greater than Rs.3,000 into EMI schemes.
Most EMI schemes have a service fee of 2.00% of the transaction amount and an interest fee of 1.33% per month.
The EMI-on-call option is not related to the transactions of gold, fuel, and jewelry.
Transactions not older than 30 days can be bundled into EMIs.
If you want to foreclose your credit card EMI, you'll need to follow a few steps. Foreclosing an EMI means paying off the remaining balance before the end of the EMI tenure.
Here’s how you can do it -
Check the outstanding balance on your EMI plan.
Contact your credit card customer service to request foreclosure.
Confirm any foreclosure charges or penalties.
Make the full payment for the outstanding balance.
Ensure the foreclosure is reflected in your account.
Want a Credit Card with High Limits & Rewards?
Credit cards are one of the most effective financial tools when used correctly. The EMI facility simplifies financial management by breaking large transactions into manageable monthly installments.
By breaking large purchases into smaller, more manageable payments, you avoid the stress of paying a big amount all at once. This makes it easier to manage your monthly budget and plan your finances better. This way you can manage your money without giving up important or wanted purchases.
Whether you're handling significant expenses or everyday purchases, having a credit card with an EMI option makes the process more convenient. Consider starting fresh with a new credit card that offers EMI to make managing your expenses easier.
How can I convert my credit card payment to EMI?
How can I foreclose my credit card EMI?
Is credit card EMI deducted automatically?
Can I pay all EMIs on my credit card at once?
How does no-cost EMI work on a credit card?
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