Credit cards are super handy when you’re short on cash, but if you can't pay your full bill on time, things can get tricky. That’s when banks or card companies offer you an option: convert your dues into EMIs (monthly installments). But is it really a good idea.
Let’s explore this in a simple way.
What Does “Converting to EMI” Actually Mean?
When you swipe your credit card and later realize that paying the full bill is hard, your bank may allow you to split that amount into smaller parts. These are called EMIs (Equated Monthly Installments). You pay one fixed amount every month, instead of the full bill at once.
This option is helpful if you don’t want to pay high interest on pending dues. But it’s not free. You usually pay some interest on these EMIs and sometimes a one-time processing fee too.
Why People Choose the EMI Option
Let’s say your bill is ₹30,000 this month, and you can’t afford to pay it all. Instead of missing the payment and getting hit with huge interest charges and late fees, you convert it into 6 EMIs of around ₹5,000 each (plus some interest).
This feels much easier, right?
That’s one of the biggest reasons why people go for this option. It helps reduce the pressure and gives you time to pay. Also, the interest rate on EMIs is usually lower than regular credit card interest, which can go as high as 40% annually!
Another plus is that when you convert dues to EMI, you don’t have to worry about late payment charges if you pay the EMI every month.
But Wait, It’s Not All Good
Now, here comes the other side. While EMIs seem friendly, they still come with extra costs.
First, there’s interest, which means you’ll end up paying more than what you originally owed. Even though it’s lower than the regular interest rate, it still adds up over time. Some banks also charge a processing fee just to set up the EMI.
Another thing: once you convert to EMI, that amount is blocked from your credit card limit. So, if your card limit is ₹1 lakh and you convert ₹30,000 to EMI, you can only use ₹70,000 until the EMI is fully paid off.
Also, no reward points are given on transactions that you convert into EMIs. So if you’re someone who loves collecting points, this might be a letdown.
When Does EMI Conversion Make Sense?
It’s a smart move only if you genuinely can’t pay the full bill and want to avoid high interest or late fees. It also makes sense when you make a big purchase like a laptop or fridge, and don’t want to drain your savings all at once.
If you’re someone who manages money well and can handle fixed monthly payments, EMI can be a safe and helpful option.
When You Should Avoid It
Avoid EMI conversion if you can pay your full credit card bill, because paying in full means zero interest and no extra charges.
You should also avoid it if your monthly income isn’t stable, or you already have many other EMIs going on. Missing an EMI can hurt your credit score and lead to more financial stress.
Bottom Line
Turning your credit card bill into EMIs can help when you're low on cash, but it's something to use only during emergencies, not regularly.
Before going for EMI, check the interest rate, processing fee, duration, pre-closure rules, and how it affects your credit limit. If used carefully, it can help you avoid big debt. But if you use it too often, it might cause more problems than it solves. For more smart tips on managing credit cards, visit RatingOK.com.
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