It is not very clear when credit cards became a necessity to lead a normal life. But the footprint left by credit card in our daily lives is quite evident. Credit cards are one of the most preferred payment modes anywhere in the world. Though digital payments have now captured considerable market share, credit cards still rule. 

Credit cards give you a breather with your month's cash flow. They allow you to meet any unexpected emergencies that may arise during a month. They also offer various rewards and discounts for using them. They are a powerful financial tool as long as you have absolute control over your spending habits. 

The major disadvantage of a credit card is that they let you spend money that you don’t have. If you are a shopaholic, you may end up with hefty credit card bills at the end of the month. Credit card bills have proved to be a burden to many a spender who loves to splurge mindlessly. 

Credit card companies then came up with an innovative solution called the ‘EMI’! Equated Monthly Instalment payments on your credit card bills. EMIs allow you to pay your entire credit card bill or specific transactions in smaller portions every month. They charge you lower interest rates on these EMIs compared to your credit card interest rate. This EMI option does come in handy when you have exceeded your repayment capacity. 

Where is the ‘EMI Payment’ option applicable on My Credit Card Bill?

The EMI option is available under two scenarios – 

  1. When you want to make a high-value purchase and won’t be able to repay it in full in your next bill. In such cases, you can convert that specific transaction into an EMI payment. Eg: purchasing a high-end smartphone or other gadgets.
  2. When you realize that you won’t be able to pay the entire bill in full in a particular month and want to convert the entire bill into an EMI payment to reduce the overall interest burden on the bill amount. 

One can choose to go for an EMI payment in either case. Here are some pros and cons of going for EMI payment on your credit card bill: 

Pros of Credit Card EMIs

  1. Lower interest rate: The interest rate charged for EMI payments is considerably lower compared to the interest rate on your credit card. So, you are reducing your overall interest burden by opting to pay in EMIs. 
  2. No documentation required: Converting your bill amount to EMI does not require any separate documentation. In fact, you can do it yourself by logging in to your credit card account online. 
  3. Get ‘No Cost EMI’ during promotions: E-commerce sellers announce periodic offers for ‘No Cost EMIs’ on your credit cards for the purchase of any new release of high-end smartphones and laptops or other gadgets. You can make use of such offers and pay in EMIs without any interest rates. 
  4. Better management of your funds: By opting for EMIs, you are able to manage your monthly cash flow better. You are able to achieve your long-time dreams by paying for them little by little every month. 

Cons of Credit Card EMIs

  1. Credit Limit Block: Though you will be paying in EMIs every month, the total amount due shall be blocked on your credit card’s credit limit. The credit balance is limited to the value of the principal outstanding when you opt for an EMI repayment scheme. The credit limit shall be released every month after payment. However, this reduces your overall credit limit available for use. 
  2. Processing Fees: Since EMIs are essentially a type of credit, your credit card company shall charge a processing fee on the principal amount. Also, a service charge is levied on the EMI amount every month along with GST. Therefore, your repayment amount will be much higher than just the EMI amount. 
  3. Credit Score: Blocking of the principal amount on your credit card essentially reduces your credit utilization ratio. This means that the purchases you make on your remaining credit limit will result in a higher credit to debt ratio, which will adversely affect your credit score. 
  4. Late payment charges: EMI payments have to be made on time every month. Missing payments will result in very high late payment charges. They will also again affect your credit score due to bad repayment history. 

How do Credit Card EMIs work?

There are two kinds of EMIs;

  1. Merchant offers EMI – In this kind of EMI, the seller or the merchant will convert your purchase into EMI payment at the time of purchase. At the time of order, card companies have partnered with stores and internet shopping portals to provide the service. You can use the EMI alternative along with a term of your choice when making payment using your card. EMI will be generated and you will receive an email with the loan's full amortization plan. In your monthly statement, the EMI will be given as a separate line item.
  2. EMI Conversion Post-Purchase – Here, you convert a specific transaction into an EMI after the transaction is made. Maybe you were unable to create an EMI at the time of purchase, or you might have chosen a merchant who is not affiliated with your credit card company, you can convert such transactions into EMIs after they have been completed. It is marketed by card issuers as an extra card benefit. This EMI facility normally charges a higher interest rate compared to those generated at the time of purchase at the merchant. Your credit card balance still contains this EMI per month and you will get an amortization plan for the same.


EMI payment is a good option if you are unable to pay your credit card bill on time and have already assessed all other alternative forms of paying the bill. Make sure to compare the interest rate charged on a credit card EMI with that of a personal loan or top-up home loan when applying for the EMI alternative. There could be cheaper alternatives than the EMI option. The EMI alternative will help hold the bills at manageable amounts and save your credit score from going down if you are on the brink of falling back on the card bill. However, as it can be a liability for a substantial amount of time, you should use the EMI repayment option cautiously.