Many credit card issuers offer users the ability to convert big-ticket credit card purchases into monthly payments called EMIs (Equated Monthly Instalments). Credit card users can directly convert credit card purchases into EMIs when purchasing from select merchants or they can use the option to consolidate various payments into a single EMI. However, this facility is usually not free and users may incur certain charges. 

Users who are planning to use the EMI facility should consider the fees and charges involved along with other factors that impact this facility. Here, we will explain how the EMI conversion facility works and also highlight some of the important factors that users must note.

How does EMI Conversion on Credit Card Work?

Credit card users can use the EMI conversion facility in two ways:

  1. Merchant EMI

Credit card issuers often collaborate with various retailers and online shopping sites to offer the EMI facility during purchase. While making payment for a purchase using a credit card, users can choose the EMI option combined with a preferred tenure. EMI is then created and users can receive an email with the amortisation schedule of the loan to be paid. The EMI reflects in the user’s monthly card statement.

  1. Post-purchase EMI Conversion

If a user could not set up an EMI during a purchase or has opted for a merchant who is not a partner of the credit card issuer, they can still convert it into EMIs. Card issuers offer it as an additional advantage on the credit card. For instance, HDFC has named this option as Smart EMI whereas SBI Card names it Flexipay.

Converting credit card dues into EMIs refers to this facility. Such an EMI conversion facility comes with higher interest charges as compared to options available at the merchant level. This EMI is included in the monthly credit card statement and users receive an amortisation schedule for the same.

Important Factors to Note While Opting for EMI Conversion

Here are some important factors to note for credit card users who want to make the most of the EMI conversion facility:

  1. Spending capacity reduces with EMI purchase 

Let us take an example to understand this point. Suppose an individual has bought a gadget worth Rs. 50,000 using the EMI facility. He/she may assume that since they have opted for a six-month or nine-month EMI period, the overall spending capacity remains unaffected. However, once the EMI option is chosen, the user’s credit limit is reduced to the extent of the principal amount outstanding. So, if he/she has a credit card limit of Rs. 50,000, a purchase of Rs 50,000 makes the available credit limit nil. Once the user repays the amount, the credit limit starts rising progressively.

  1. Users can negotiate the EMI processing fee 

An EMI option usually has a one-time processing fee charged by the bank or credit card issuer. The fee can be a small percentage of the loan amount. Some issuers may also charge the fee as a fixed sum depending on the credit card category and the purchase amount. Most cardholders are not aware that there is a scope to negotiate with the bank or card issuer for getting a waiver on the processing fees. However, this could depend on the user’s brand loyalty and flawless repayment history. Users can discuss this with the bank and try to avail a waiver for reducing overall purchase charges.

  1. Choose online purchase 

Online retailers often tie up with merchant banks for offering the EMI option. This helps them to promote online sales. Users who are looking to make purchases through credit card EMIs can check for this option at various online marketplaces like Amazon. This way, they can get a good deal and also discounts by avoiding retail commission costs. 

  1. Try prepayment penalty waiver 

Credit card EMI options may have a prepayment penalty clause that charges users an amount for pre-paying their outstanding principal amount. For loyal customers and long-time credit card holders, banks allow negotiation for a waiver of such penalty charges. For example, if a user plans to move abroad and wants to pay off all outstanding dues and has a good track record with flawless repayment history, the bank may allow the freedom to negotiate for a waiver.

  1. Settle dues in full

Credit card debt must never be ignored, else it can prove very costly. Card users need to pay dues in full and never leave outstanding balances that can attract penalties and interest. Penalties can come in the form of heavy interest charges ranging between 25-40%. This can make it more expensive than other debts like personal or home loans.

  1. Not every credit card has an EMI facility 

Before using an EMI facility, users must check whether their credit card has it. Many credit card users end up making purchases assuming that the card will have an EMI option. However, it is important to check and ascertain before signing up for a credit card. Users must also try and go through the terms and conditions associated with EMI payments.


The EMI option can help in ensuring that users can maximize their credit card usability. Converting big-ticket expenses into EMIs can help in clearing credit card dues with minimal financial impact. However, EMI conversion should not be made a regular habit as it can affect one’s savings in the long run. Before using it, users must check whether they can afford to pay for purchases in full by the due date.


  1. When should we convert credit cards to EMI?

People who are finding it difficult to pay their credit card bills by the due date may opt for EMI conversion at the earliest. Those who have a high amount outstanding and are not able to clear it through a single payment can use the EMI option.

  1. Can I convert my credit card bill to no cost EMI?

Depending on the credit card you use, you can avail of the no-cost EMI option for paying the bill. 

  1. Does converting to EMI affect credit score?

As long as the monthly EMIs are paid on time and as per schedule, the conversion will not affect credit score in most cases.

  1. How can I convert credit card bills to EMI?

To convert credit cards to EMI, you must reach out to your card issuer or bank and request the facility. Availability of the same depends on your eligibility and the bank’s or issuer’s norms.

  1. Is GST applicable for credit card EMI?

GST will be applicable on credit card EMI if the bank or issuer charges processing fees and will generally be a small percentage of the fees.