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Advantages of HSBC Credit Card EMI Conversion

Deferred Payment - One might find it difficult to pay their credit card bills in full. They might even want to make expensive purchases. In such instances, they can convert their purchases into EMI and pay them off gradually throughout the credit period.

Reduced upfront Financial Strain - Since customers pay off the amount over an extended period, the financial burden is reduced to a large extent. This is beneficial for salaried individuals or even others wanting to purchase an item without straining their monthly budgets.

No-cost EMI - This is the best option when one applies for EMI conversion. This option involves providing credit to customers without charging an interest rate or processing fees.

Disadvantages of HSBC Credit Card EMI conversion:

Interest Accrual- The EMI conversion facility is however not free, as the cardholders are charged interest. The HSBC Credit Card EMI interest can be around 1.5% (Monthly Reducing Balance) for post-purchase EMIs or 14% for Merchant EMIs.

Blocked Credit Limit - When customers utilize the credit limit the amount is blocked against the total available credit limit. The limit is released only when the amount is paid. The unlocked limit is equal to the EMI paid every month.

Increased Credit Utilization - Since a part of the credit limit is blocked, the available credit limit is reduced and thus, customers who continue to use their cards similarly will use most of their credit limit. This will lead to an increase in their Credit Utilization Ratio, which reduces their credit score

Credit Utilization is the ratio between the total credit limit and utilization.

Points to Remember about HSBC Credit Card EMI conversion

  • Tenure - Banks generally offer a low-interest rate on EMIs with longer tenures. This makes them look attractive, especially when compared to short loan tenures with higher interest rates. However, this is not true as the cardholder ends up paying more interest with the longer tenure option.
  • Credit Card - All Credit Cards do not charge the same interest on EMI conversion. At times even cards from the same bank charge different rates of interest. Customers must thus compare interest rates before applying.
  • Lost Benefits - Another important consideration is that the customer might not earn reward points or discounts for merchant EMI conversion. If the benefits offered are significant then customers should save for the purchase.
  • Timely Payments - Customers are also required to ensure that they are capable of making timely payments every month to avoid credit card bill overruns. The reasons for the same are:
  • Lost Interest-free period - The interest-free period offered during the EMI payments period is lost if the customer misses a payment.
  • Credit Card Interest rate - HSBC's credit card interest rate will come into effect when the outstanding amount is not cleared. The interest rate is about 42% p.a. This may lead to an insurmountable interest burden for the customer.
  • Credit Score - Any default or missed payment lowers the credit score.

HSBC Credit Card Facility

HSBC offers two different facilities for the conversion of purchases and outstanding amounts as below:

  • Instant EMI - It facilitates the conversion of their transactions into EMIs. Eligible purchases must exceed Rs. 2000/- and must be converted before the due date for payment.
  • No Cost EMI - No Cost EMI is offered by merchants and can be availed only on select products/ tenures only. The interest charged by the bank is provided as Cashback by Merchants, which effectively makes it at no effective interest.

Ways to opt for HSBC Credit Card EMI Conversion

There are two ways through which customers can apply for EMI Conversion

Merchant EMI Conversion

This option involves conversion at the Point of Sale. The customer has to request the merchant to convert the purchase into EMI at the time of the payment, in case of retail purchases.

  • Visit: www.hsbc.co.in/credit-cards/features/balance-transfer/
  • Click on ‘Apply Now’ under the Balance Transfer Option
  • Enter the required details in the specified form’
  • Lastly, click ‘Submit’ after entering all the required details.
  • An HSBC representative will contact you with the ensuing steps.

Customer Care/ Phone Banking

HSBC Instant EMI Facility: This facility can be availed by select credit card holders only. Customers will have to contact customer care at 1860-108-7788.

HSBC Balance Transfer on EMI

Any customer availing of the HSBC Balance Transfer on EMI facility can opt for transferring any outstanding amount in excess of Rs. 5,000 on credit cards with other banks to their HSBC credit card account and repay the same, while enjoying the convenience of EMIs with a lower rate of interest. This facility is called the HSBC Perpetual Balance Transfer.

HSBC Perpetual Balance Transfer Features and Benefits

  • The Perpetual Balance Facility (PBT) allows you to the convenience of paying a lower interest rate that the rates on your other credit card accounts
  • To avail of the facility, you need to make a minimum repayment of Rs 100 or 5% of the outstanding PBT amount every month, whichever is higher.
  • The rate of interest is as low as 1% to 1.2% per month of the outstanding amount of PBT.
  • Also, there are no foreclosure charges for early repayment.

Are any Tenure options provided on EMI Conversions?

For No Cost EMI options - 3 , 6, 9 ,12 months

For Normal EMI tenures- 6, 9, 12, 18 , 24 months.

Also, an additional condition for the above amounts over Rs. 30,000 can be converted into 18 & 24 months EMIs only.

Considerations while Applying HSBC’s EMI Conversion on Credit Card

  • The Conversion option is not available for purchases involving gold, and jewelry and also for cash withdrawals, balance transfers, and card fees.
  • Once the convert to EMI option is availed, any reward points on the card will be reversed.
  • The cardholders cannot close their cards during the EMI tenure.
  • Any requests by add-on cardholders will be billed to the primary cardholder.
  • Corporate credit cards are ineligible for EMI conversion
  • Foreclosure and cancellation charges are applicable if the user wants to foreclose or cancel the EMI facility before the end of the tenure.

Factors to keep in mind for an optimal choice for EMI Conversion

Conversion of outstanding credit card bill

This option allows credit card users to convert their entire credit card bills or a part of them into EMIs.

They can repay the unpayable portion of credit card bills in smaller tranches through EMIs

Conversion of select transactions

This option facilitates users to convert beyond a specified predefined threshold amount set by the card issuers into EMI. Exercising this option can be beneficial to users who wish to convert only specified card transactions into EMIs.

Credit Card balance transfer on EMI

Credit Card issuers generally offer the facility of EMI conversion on credit card balance transfers. This allows the user to transfer the outstanding credit balance of a credit card to another credit card issued by a different card issuer and then convert the transferred balance to EMIs.

FAQs of HSBC Credit Card EMI

1. Can I change the tenure of the EMI?

No, the tenure of the EMI cannot be changed once it is selected by the customer.

2. What if the credit card is closed before paying off all the installments?

If the credit card is closed before paying off all the installments then the remaining amount is debited to the credit card as one single amount that is due for the customer.

3. Is any processing fee applicable to avail of the EMI facility?

No, there is no fee applicable for availing of the EMI facility at HSBC bank.

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