Credit cards provide instant finance and increase your purchasing power. However, you will have to settle your credit card bill on or before the due date.  Credit card issuers usually charge a high rate of interest on late payments. Even if you pay the minimum amount, the remaining amount will attract interest. Also, any ensuing purchases, which get added to the bill will attract interest until the bill is settled in full. If you are not able to pay the credit card bill amount in one go, you can break it into EMIs. This will reduce your financial burden. Generally, a good credit score and credit history are essential for this feature to be available on your card. Besides reducing your financial burden, there are other advantages of converting your credit card purchases into EMI.  

Benefits of Converting Credit Card Purchases into EMI

Finances Can Be Managed Better

When the credit card bill is split into smaller EMI payments, you do not have to pay the entire credit card bill amount in one go. You can repay in smaller payments. This will reduce your financial burden. 

Can Create Big Savings 

Since the borrower does not have to pay the entire bill amount, he can put the money in his savings account and earn interest on it. He can make some big savings. 

Repay Your Outstanding Credit Dues at Lower interest

When you default on your credit card bills, the following are some of the consequences:

  • it will attract heavy interest rates (23% - 49% per annum depending on the credit card used) and penalty charges.   
  • Even if you fail to pay the minimum amount due, it will attract charges of up to 1300 to 1500 per billing cycle depending on the bill amount due and the credit card issuer.  
  • Default on credit card bill payments will lead to withdrawal of the interest-free period until you clear the debt.

So, the best option will be to convert your outstanding payments to 

EMIs, since interest charged on EMI conversions generally fall between 11 to 24% per annum depending on the credit card issuer. 

Improves Credit Profile

Since customers are going to pay in EMIS, they have fewer chances of defaulting on payments. Thus, they can improve their credit history over a period of time gradually.

Related Read: How to maintain a good credit history 

Flexible Repayment Tenure 

The repayment duration of the credit card bill can be chosen. Usually, the tenures are 3, 6, 9, and 12 months. Some banks allow an extension of 36 months. 

Merchant EMI Offers

Nowadays many merchants and eCommerce platforms offer EMI options on goods purchased through credit cards. This model involves tie-ups between merchants, banks, and credit card issuers. The interest levied on EMIs on purchases is much lesser than the interest levied on EMI conversions. 

Minimal to Zero Paperwork Involved

There is very little paperwork involved in converting your credit card purchases to EMIs. So, you can now buy without feeling anxious about submitting a considerable amount of documents. 

No-Cost EMI Schemes

No-cost EMIs are just like other equated monthly payment options, but you don’t have to pay interest on the principal amount. 

No-cost EMIS work as follows:

  • In the No-cost EMI schemes, the interest you have to pay on buying a product or service will be offered as a discount during checkout
  • The cost of interest is borne by the merchant and the buyer has to repay only the actual price of the product or the service. 
  • However, the card user has to pay the GST levied on the purchase. 
  • Some card issuers offer cashback, reward points, and discounts on those who avail of No-cost EMIs. This depends on the tie-ups with merchants or the sellers. 
  • With No-cost EMIs, while you do not have to pay the complete price of the product up front, you should not overlook the hidden costs that come along with these EMIs. 

Helps in Meeting Financial Emergencies

During financial emergencies, you may not be able to pay the entire credit card bill on time. Converting into EMIs will help during these times.  

What Can Be Converted to EMIs and What Cannot be?

There are a variety of items for which EMIS can be paid, and it also depends on the bank. Different banks provide options for paying through EMIs for different things. Some of the most common items are:

  • Electronic devices
  • Travel expenses
  • Insurance costs
  • Lifestyle expenses
  • Purchase of garments

Most banks do not allow EMIS for the purchase of jewellery and precious metals like gold, silver, and so on. 

Things to be Kept in Mind During EMI Conversions

  • You should choose the right tenure: Longer tenure loans offer lower rates of interest. However, you will end up paying more. So, choose the tenure carefully.
  • Compare the various options: If you have multiple credit cards, then you must compare the interest rates offered on them. 
  • Loss of reward points: Sometimes, EMI conversions will lead to loss of reward points. If the number of reward points offered is significant, then it is better to use these points to save money on your purchase rather than converting it into EMIs.
  • Credit Limit is lowered: When you convert your purchase into EMIS, the credit limit gets lowered until you pay off your EMIs. Every time you pay an EMI, the credit limit increases, and the amount is equal to the EMI paid.
  • Credit Score: When the credit limit gets lowered, the credit score drops. This is because the credit utilization ratio spirals up. It is the ratio of purchases made to the credit limit. 
  • Timely payments: Timely payment of EMIs is important. Otherwise, they will attract penalties. It will lead to the accumulation of EMIs, which will lead to a debt trap.

Related Read: How can you convert an outstanding credit card amount into EMI?


Credit cards are great financial tools that aid us to defer payments on purchases made. It is however essential to use them judiciously. If you cannot pay your credit card bill on or before the due date, you can consider converting them into EMIs. 

FAQS Advantages of Converting Credit Card Purchases into EMIs

1: Will the Credit Card Limit come down when you purchase through EMIS?

Yes. The credit card limit will come down when you purchase through EMIs. Suppose you buy a product or a service for 60,000 and make a purchase for 40,000, then your credit card limit will become 20,000 when you choose to pay back through EMIS.

2: How can you convert your credit card bill into EMIs?

You can log into your net banking account and choose the options for conversion. You can also call the customer care helpline number or visit the branch of the credit card lender to pay the EMIs of your credit card bill. You can either convert the entire bill into EMIs or select only specific transactions which cross the threshold amount. 

3: What are the various forms of EMI payments on credit cards?

  • EMIs with Interest: These EMIS have a principal as well as an interest component. The outstanding amount on your purchase for a certain rate of interest over a fixed tenure is calculated, which is then divided into equal payments for 6 months. 
  • Interest-Free EMIs: Some credit card issuers allow interest-free EMIs. This will mostly happen when you are buying with a merchant that has a tie-up with the credit card issuer. Also sometimes, the discount offered on the product will be withdrawn. There will be a considerable difference in the actual purchase price and the one on which the discount is applied. 

In both these types of EMIS, a one-time fee - processing fee is charged, which is a percentage of the transaction amount.