One of the key benefits that credit cards offer to the cardholders is the option of converting the big purchase items into EMI or Equated Monthly Instalments. With this feature, you do not have to pay the entire amount at one go, you can pay a portion of it at a fixed interval, as opted by you.

In this blog, we’re going to discuss everything that you need to know about converting your credit card payment to EMIs.

Why Pay Your Credit Card Payments In EMIs?

Whenever you make any high-value purchase with your credit card, the card-issuing bank expects you to pay for it by the next due date.

If for any reason, you miss the payment deadline, you not only need to pay a late payment fee, but also a high-interest rate on the unpaid amount.

However, if you avail the option to split your credit card payment into EMIs, you don’t require to pay the entire purchase amount together, but over a fixed period that suits your budget and timeframe.

It is a kind of credit card loan, the interest rate charged for which is lower as compared to interest on late payment on revolving credit option and is calculated on monthly reducing balance.

Eligibility Criteria

Although most of the banks offer the option of EMI payment on credit cards, you need to confirm with your respective bank whether your card is eligible for this option.

Apart from this, most of the banks offer this option of EMI on their credit cards only on transactions above a certain value. This minimum value generally varies from bank to bank.

Fees & Charges Associated With Converting Credit Card Payments into EMIs

Using credit card EMIs is one of the most common methods for making expensive purchases more pocket-friendly. Best credit cards with no annual fee give you the easy option of converting your outstanding balance to EMIs.

But there are multiple charges & fees associated with converting your credit card payments to EMI facility which you need to know about.

These include -

Interest Rates 

Typically, the interest rate of credit card EMI is dependent on the type of credit card you have and the relationship you have with the bank. Usually, the interest rates on post-purchase conversions are higher than merchant EMIs.

Interest rates by some of the top banks are listed below-

Bank Interest rate Tenure
HDFC Bank 1.5% per month 9 months-3 years
Axis Bank 1.5% per month 6 months-2 years
ICICI Bank 12.99 % 3 months-2  years

Prepayment Charges

In some cases, the banks might charge you a prepayment fee in case you wish to clear the dues before the end of the tenure. This is around 3% of the outstanding amount at the time of clearance.

Processing Fees

Credit card providers, in a few cases, also charge a processing fee to convert transactions into EMI which can range from 1% to 3% of the transaction amount.


GST is charged at 18%, applicable on all credit card charges (wherever applicable)

How Does The EMI Option On Credit Cards Work?

EMI on credit cards works in a very simple way. If you are buying a product which is more than Rs.20,000, for example, furniture, vehicles, or an electronic appliance, you can convert it to an EMI.

The EMI will be calculated based on the rate of interest charged by the bank, down payment you make and the tenure you choose.

Here is an example of how to convert credit card payment to emi in HDFC bank -

Suppose you have purchased a electronic worth Rs.50,000 with your HDFC credit card and pay Rs.20,000 as a down payment.

The rest Rs.30,000 can be paid as EMIs for a period of 1 year with an interest of 12%.

The EMI you will need to pay for 12 months will be Rs. 3,600.

You need ta approach the HDFC bank in this case to avail the option of EMI conversion and get it converted via net banking, by calling the customer care or visiting the nearest bank branch.

If you’re eligible for EMI conversion, HDFC will process your request and convert the outstanding into EMIs or small instalments.

Further, you can either convert the entire credit card billing amount into EMIs or select specific card transactions surprising a threshold amount (big purchases) for which you want to pay via EMIs.

Benefits Of Converting Credit Card Payment Into EMI

There are numerous benefits associated with the conversion of credit card outstanding payment into EMI. Some of these are -

Reduces interest rate

The interest rate on credit card EMI conversion ranges anywhere between 13%-20% per annum, which is much lower as compared to the interest rate on revolving credit without EMI, which is in the range of 30%-45%.

Further, most banks levy credit card EMI interest on reducing balance basis which means the rate will apply on your reducing balance of the outstanding amount instead of on the entire amount. This brings down your overall interest substantially.


You have paid an EMI worth ₹5,000 on a total outstanding of ₹25,000.

The interest will be levied on the remaining balance of ₹20,000 and not ₹25,000

Mends your credit history

Unlike the revolving credit card dues, the defaults can be eliminated from your payment cycle by converting your credit card payment to EMIs.

This is simply because the EMI amount would be much easier to pay, thus reducing the scope for any late payment. This helps you prevent not only the late payment charges but also mend your credit history spoiled by default due to mounting card dues.

Advantage of flexible repayment tenures

Conversion of credit card payments to EMIs gives you the advantage of a flexible repayment tenure ranging from 3-24 months, with few banks giving as high as 4 years.

This allows you to convert the huge outstanding balance in small instalments over an extended repayment period thus saving you from getting stuck in the cycle of minimum due to payments.

When Should You Choose The Credit Card EMI Conversion Option?

It is, however, advisable to consider the credit card EMI option only in case of an emergency when either the purchase amount is too high or you are unable to pay your credit card dues in time

Before applying for the credit card EMI option, make sure to compare the interest rate levied on your credit card EMIs against a personal loan or top-up home loan and choose the cheaper option.

To Conclude

Credit card EMIs is a great way to help you maximise the usability of your credit card.

However, before you decide to go with this option make sure to be timely with your payments, thoroughly understand the terms and conditions, and know all the charges associated with the conversion.


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