How to Convert Your Credit Card Purchases into EMIs

How to Convert Your Credit Card Purchases into EMIs


Making big-ticket purchases on a Credit Card can sometimes lead to a financial squeeze, especially when one must pay off the entire amount at once. However, it's possible to convert these purchases into easy EMIs. By opting for the EMI facility on credit cards, individuals can break down big-ticket expenses into smaller, more manageable monthly instalments. This helps them better plan their finances and saves them from the burden of high-interest payments.

This article explores the step-by-step process of converting Credit Card purchases into EMIs. Understand the eligibility criteria and key factors before opting for this facility, as it can be a game-changer for financial planning.

Understanding Credit Card EMI Conversion

Credit Card EMI conversion is a facility that allows individuals to convert their Credit Card purchases into equated monthly instalments (EMIs). Instead of paying the entire purchase amount in one go, they can pay it off over a tenure of between 3 to 24 months. This can help make significant expenses more affordable by spreading out the cost. It also makes the expense much easier on the monthly budget.

Eligibility Criteria for Converting Credit Card Purchases to EMIs

Understanding the eligibility criteria can help individuals make informed decisions and unlock the benefits of EMI conversions on their Credit Card purchases.

  1. Credit Card Type and Variant: Not all Credit Cards offer the EMI conversion facility. To apply for an EMI conversion, verify eligibility for the card variant with the bank or Credit Card issuer, typically found on their website or through customer support.
  2. Credit Limit and Available Balance: Banks allow converting purchases into EMIs up to a percentage of the total credit limit, and individuals need a sufficient card balance to accommodate the purchase amount. If the card is close to its maximum limit, one may not be eligible until they pay off some outstanding balance.
  3. Purchase Amount and Transaction Type: Banks and Credit Card issuers also set minimum and maximum limits on the purchase amount that can be converted into EMIs. Federal Bank allows EMI conversions on purchases from ₹1,500 to ₹7,50,000. Certain types of transactions may also be excluded from EMI conversions. These include cash withdrawals, fuel purchases, and transactions at specific merchant categories like jewellery or real estate.
  4. Repayment Tenure and Interest Rates: Banks offer EMI tenures ranging from 3 to 24 months, depending on the purchase amount and card variant. The actual interest rate offered will depend on factors like an individual's credit score, repayment history, and the bank's policies.
  5. Credit Score and Repayment History: A good credit score, usually above 750, indicates a strong repayment capability and is an essential eligibility criterion for EMI conversions. On the other hand, a low credit score or history of delayed payments and defaults can make it harder to get approved for EMI conversions.

Step-by-Step Process to Convert Purchases Into EMIs

Step 1: Make the Purchase

Start by making the desired purchase using the Credit Card. This could be anything from a new smartphone to a holiday package, as long as it meets the minimum transaction amount for EMI conversion.

Step 2: Choose the EMI Option
Once the transaction is complete, the card user will typically receive an SMS or email from their bank, offering the option to convert the purchase into EMIs. Alternatively, they can log in to the bank's net banking portal or mobile app and navigate to the Credit Card section to find the EMI conversion option.

Step 3: Select the EMI Tenure
Next, choose the EMI tenure that best suits one's repayment capacity. Banks usually offer tenures ranging from 3 to 24 months. Remember that longer tenures may mean lower monthly instalments but higher overall interest costs.

Step 4: Confirm the EMI Conversion
After selecting the tenure, review the EMI details, including the monthly instalment amount, total interest payable, and processing fees (if any). If one is comfortable with the terms, confirm the EMI conversion.

Step 5: Repay the EMIs
Once the conversion is processed, the EMI amount will be added to the monthly Credit Card bill. Be sure to pay the Credit Card bill in full and on time each month to avoid late payment fees and negative impacts on one's credit score.

Check out our Credit Card EMI Calculator to calculate the EMI.

Finally

Converting large Credit Card purchases into affordable EMIs can be a smart way to manage expenses and free up monthly cash flows. Avail Federal Bank's attractive EMI conversion options on Credit Cards and benefits like high credit limits, cashbacks, and discounts.