Using a credit card for large purchases is common. But paying off big bills later can be stressful. In such cases, converting your credit card balance into EMIs is a good option. Credit cards make shopping easy. With just a swipe, you can complete transactions instantly. Most banks offer credit cards with minimal paperwork. Plus, you earn reward points, cashback, and discounts on every transaction. A credit card gives you access to credit anytime, anywhere. However, excessive use can lead to high outstanding amounts.
The realisation hits when you see a huge bill. A large due amount can be difficult to manage. You can reduce this burden by converting your balance into EMIs. If you are in this situation, opting for a credit card EMI is a smart move.
Benefits of Converting Credit Card Outstanding into EMIs
Lower Interest Rate
Choosing the EMI option reduces interest costs. Banks usually charge interest only on the unpaid balance, not the entire amount. For example, if your outstanding amount is Rs 50,000 and you pay Rs 10,000, interest applies only to Rs 40,000. This makes EMIs a cost-effective way to manage credit card debt. The interest rate on EMIs is usually lower than the normal credit card interest rate, which can be as high as 36% annually. Additionally, banks often offer promotional low-interest rates on EMI conversions. This means you can avoid paying high interest while managing your payments better. By selecting the EMI option, you can break down a large debt into smaller, manageable payments without facing excessive charges.
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Flexible Repayment
EMIs allow you to repay over a longer period. Small instalments ease financial pressure. But avoid paying only the minimum due. It attracts a 5% charge on the outstanding amount, leading to growing debt with interest. Many banks offer flexible EMI tenure options, ranging from 3 months to 24 months, depending on your financial capability. This allows you to select a repayment plan that best suits your budget.
Adhil Shetty, CEO of Bankbazaar.com, says, “If you have a sudden financial crunch, converting your credit card balance into EMIs ensures you do not default on payments. Having a structured repayment plan also means you can avoid unnecessary penalties. The flexibility in repayment makes it easier for cardholders to manage their finances without falling into a debt trap.”
Maintains Credit History
EMIs do not harm your credit history. Instead, they help avoid late fees and improve your credit score. Paying your EMIs on time keeps your credit score stable. A good credit score is essential for securing future loans and credit approvals. By opting for EMIs, you ensure that you are making regular payments, which reflects positively on your credit report. Missed payments or revolving high balances can damage your credit history and make it difficult to get loans at favourable terms. Credit card EMIs help you avoid such issues by providing a disciplined repayment structure. Additionally, if you maintain a good credit repayment history, you may also become eligible for higher credit limits and better offers from banks. This makes EMIs a beneficial option for maintaining a healthy financial profile.
How to Convert Credit Card Outstanding into EMIs
1. Internet Banking
Log in to your internet banking account. Select the ‘Convert to EMI’ option under the credit card section. Most banks provide this feature under the credit card management section. Once selected, you will be shown different tenure options and interest rates applicable to your outstanding balance. Carefully review the terms and conditions before proceeding. Some banks may charge a processing fee for EMI conversion, so it is essential to check for additional costs. Once you confirm your EMI plan, the monthly instalments will reflect in your billing cycle. Internet banking makes it quick and hassle-free to opt for EMIs without any paperwork. Always ensure that you read the fine print before selecting your EMI plan to avoid any hidden charges.
2. SMS Request
Send an SMS to your bank’s official number. You will receive a call from the bank to confirm the EMI conversion. Many banks provide a pre-set format for requesting EMI conversion via SMS. For example, you may need to send a specific code along with your card number to the designated banking number. Once your request is received, the bank’s representative will contact you to discuss available EMI plans. This method is convenient for those who do not have internet access. However, ensure you send the SMS from your registered mobile number linked to the credit card. Some banks may require further authentication to process your request. Keep an eye on your SMS inbox for confirmation of EMI conversion and the details of your new payment structure.
3. Customer Care
You can also reach out to the bank’s customer care service and provide your card details and request them EMI conversion. The representative will guide you through the available EMI plans and applicable interest rates. Ensure you have your credit card details handy before making the call. Some banks may require additional verification for security purposes. Once your EMI request is approved, you will receive a confirmation message and an updated billing statement. This method is ideal for those who prefer speaking to a bank representative directly. It also allows you to clarify any doubts regarding interest rates, tenure, and processing fees. Always note down the reference number for your EMI request in case of any discrepancies later. Using customer care services ensures a smooth conversion process with complete guidance from the bank’s team.
The bank has the right to approve or reject your request. Before opting for EMIs, use the Credit Card EMI Calculator to check your monthly payments. This helps you plan your finances better.
