How to Use Credit Card EMIs for Big-Ticket Purchases

How to Use Credit Card EMIs for Big-Ticket Purchases


When it comes to financing big-ticket purchases, Credit Card EMIs can be an innovative and convenient option. Whether one is planning to buy the latest electronics, take that dream vacation, renovate their home, or invest in education, converting Credit Card spending into easy EMIs allows them to spread out the cost over a longer tenure. Explore the benefits of choosing Credit Card EMIs and learn some clever strategies to help one make the most of Credit Card EMIs for big-ticket buys.

Benefits of Using Credit Card EMIs

Credit Card EMIs allow card users to split a big-ticket purchase on their Credit Card into smaller, equal monthly instalments over a fixed tenure, usually ranging from 3 to 24 months. Instead of paying the entire amount at once, the user pays back the purchase price in EMIs and applicable interest. Understand the advantages of using EMIs for various purchases:

  1. Affordability: EMIs make big-ticket purchases more affordable by distributing the cost over several months, which is easier on monthly cash flows.
  2. Flexibility: Card users can choose a flexible repayment tenure based on their repayment capacity. Longer tenures mean smaller monthly EMIs.
  3. Convenience: EMIs eliminate the need to save significantly or dip into savings or investments for big purchases.
  4. Opportunity to build credit: Timely EMI payments reflect positively on an individual's credit report, improving their credit score over time.
  5. Attractive offers: Banks often partner with brands to offer low—or no-cost EMIs, discounts, cashback, or reward points on big-ticket purchases. Check out Federal Bank's Credit Card EMI Offers now.
  6. Easy to Avail: Converting Credit Card purchases to EMI is usually a simple process that can be done online, through customer care, or at the merchant's POS terminal.

Strategies for Smart Credit Card EMI Usage

  1. Plan Purchases Wisely
    Avoid impulse buys and carefully plan big-ticket purchases. Create a budget, factoring in one's income, expenses, and savings. Use EMIs only for necessary or well-thought-out buys that fit the budget. Remember, an EMI is still a debt that needs to be repaid.
  2. Negotiate a Better Deal
    Before opting for an EMI plan, try negotiating with the merchant for additional discounts or freebies to sweeten the deal. Individuals can also check with the Credit Card issuer if they have any ongoing EMI offers or tie-ups with the merchant, which can help them save more.
  3. Read the Fine Print
    Before signing up, understand all EMI terms and conditions, including interest rates, processing fees, foreclosure charges, and late payment penalties.
  4. Compare EMI Offers Across Banks
    Don't just settle for the first EMI offer that one may come across. Compare the EMI plans, interest rates, processing fees, and tenures across different banks and cards. Some valuable factors to consider:

    Factor

    What to Look For

    Interest Rate

    Aim for lower rates

    Processing Fee

    Opt for low processing fee plans

    Tenure

    Choose a comfortable tenure that fits the budget

    Loan Amount

    Ensure the purchase amount is eligible for EMI
  5. Choose Low-Cost EMIs Where Possible
    Low-cost EMIs are a great option, as one pays minimal interest or processing fees. Look for festive season offers and special e-commerce partnerships that may offer low-cost EMIs.
  6. Automate EMI Payments
    Missing an EMI payment can hurt one's credit score and attract penalties. Automate monthly EMI payments by setting up standing instructions for the bank account. This ensures card users never miss a payment due date.
  7. Avoid Multiple EMIs and Overextension
    While breaking up all big buys into EMIs may be tempting, avoid taking on too many EMIs at once. Overextending oneself can strain the monthly budget and impact the ability to repay. Stick to 1-2 EMIs simultaneously, closing existing ones before taking on new EMIs.
  8. Prepay and Foreclose When Possible
    If one receives a windfall like a bonus or a tax refund, consider prepaying or foreclosing the ongoing EMIs. Most banks allow foreclosure at minimal charges. Foreclosing helps individuals get debt-free faster and saves on interest costs in the long run.
  9. Opt for Shorter Tenures
    While longer EMI tenures mean smaller monthly payments, they also result in higher total interest outgo. Opt for the shortest comfortable tenure to save on interest charges.
  10. Use EMI Calculators to Plan Better
    Most banks offer online EMI calculators on their websites. Use these calculators to input the purchase amount, interest rate, and tenure to determine monthly EMI commitments in advance. This helps you better plan your monthly budget and expenses.

To Conclude


Credit Card EMIs are a smart financial tool when used responsibly and provide a flexible and affordable way to spread costs over time. Ready to turn big-ticket dreams into affordable realities? Explore Federal Bank's feature-packed Credit Cards and EMI offers today.