How to convert credit card bill to EMI? Check interest rate, tenure & fees

Some banks may charge a one-time processing fee for converting payment balance into EMIs

Managing credit card bills can be challenging when unexpected expenses arise. A practical solution is converting credit card bills into equated monthly installments (EMIs). This allows cardholders to pay off their outstanding amounts in manageable monthly payments, making it easier to budget and avoid high-interest rates associated with late payments.

 

“Converting your credit card bill into EMIs is simple; most banks offer this facility to ease repayment. You can request EMI conversion through internet banking, mobile apps, or customer care. However, it is important to check if your transaction or total bill amount qualifies,” said Adhil Shetty, chief executive officer of Bankbazaar.com

 

 

“Banks usually set a minimum limit, often Rs 3,000 or more. Select a suitable tenure, ranging from three to 24 months. Longer tenures mean lower EMIs but higher interest costs. Interest rates vary by bank, typically 12 per cent–24 per cent per annum,” said Shetty.

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Benefits of converting credit card bills to EMIs

 

Budget management: Splitting large payments into smaller monthly installments makes it easier for consumers to manage their finances without straining their budget.

 

Interest rates: The interest charged on EMIs is generally lower than the penalty rate for missed payments, making it a more economical option for managing debt.

 

Flexibility in payment plans: Customers can choose from various tenures based on their repayment capacity, allowing for personalized financial planning.

 

“Some banks offer no-cost EMI on select purchases, where the seller bears the interest. Processing fees may apply, usually 1 per cent to 3 per cent of the converted amount. Once approved, your outstanding balance is split into EMIs. These will be billed every month until repayment is complete. Prepayment may attract foreclosure charges, so check terms before opting in. Converting to EMIs helps manage cash flow but increases overall costs due to interest and fees. Use it wisely, especially for high-value purchases,” Shetty said.

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Key points to consider

 

While converting credit card bills to EMIs, consider these points:

 

Interest rates: The interest rate for EMI conversions can vary significantly between banks, often ranging from 1.5 per cent per month to higher rates depending on the bank's policy and the customer's credit profile.

 

Processing fees: Some banks may charge a one-time processing fee for converting your balance into EMIs. It is crucial to factor this cost into your decision-making process.

 

Impact on credit limit: When you convert a purchase into an EMI, the entire amount is blocked from your available credit limit until it is paid off. This could affect your ability to make additional purchases on credit.

 

Pre-closure charges: If you decide to pay off your EMIs early, some banks may impose pre-closure fees, typically around 3 per cent of the outstanding principal amount.

 

Credit score considerations: Making timely EMI payments can positively impact your credit score; however, late payments can have adverse effects.