We all dream of owning big things. Maybe you want a cool electric car or a fancy home gym to stay fit. Or perhaps you just want a cool new entertainment system for your parents. But this stuff costs a lot of money. Buying a Tesla, Peloton bike, or home theater system can be expensive. It’s tough to pay for it all at once. That’s where an EMI card comes in. It’s a special card that lets you pay for big things over time.
Instead of paying all at once, you can split the cost into smaller monthly payments. So you can make your dreams come true without wrecking your budget.
Intrigued? Learn more about the credit EMI card in this piece.
What is Credit Card EMI?
A credit card EMI (Equated Monthly Installment) card is a payment option offered by financial institutions or credit card issuers. It allows individuals to purchase goods or services and pay them monthly over a specified period. The cardholder can convert their purchases into EMIs and repay the amount over time, usually ranging from a few months to several years, depending on the terms and conditions.
EMI cards are often used to purchase high-value items like electronics, appliances, furniture, or even for services like travel or healthcare. They allow consumers to manage their expenses by spreading the cost over a period rather than paying the full amount upfront. These cards may also come with special offers, discounts, or zero-interest EMI schemes, making them attractive to consumers looking to make large purchases without straining their finances.
Key Features and Benefits of a Credit Card EMI
Let’s break down what makes a credit card EMI Card so cool: One of the best things about using credit card EMIs is the flexibility they provide when it comes to repayment. You typically get a range of tenures to choose from, anywhere from 3 months to 24 months.
This means you can pick a repayment period that really fits your budget and cash flow—no need to stress about having to pay everything back in a short timeframe.
The interest on credit card EMI can vary quite a bit between different banks and card issuers. Generally, shorter repayment tenures tend to have lower rates, while longer EMI periods come with higher interest charges.
It’s also good to know that most banks use a “reducing balance” method to calculate the interest – so the rate applies to the outstanding amount each month, which goes down as you make your payments.
Another super convenient feature is the automatic EMI conversion on eligible purchases. If you’re making a big-ticket purchase that qualifies, the card issuer will automatically convert that entire transaction into an installment plan for you. You don’t have to go through any separate application process or get additional approvals—it all just happens seamlessly at the time of purchase. It couldn’t be easier!
Speaking of approvals, some credit cards even come with pre-approved EMI limits that you can start using right away. So you don’t have to worry about whether the bank will give you the green light before you can move forward with your purchase. The credit limit is there and ready for you to utilize.
The best part is that you can use these credit card EMI options for both online and in-person shopping. Whether you’re buying something from an e-commerce site or making a purchase at a physical store, the EMI functionality works the same way across different sales channels. There is total flexibility there.
Credit card EMIs also have robust security measures, requiring one-time passwords to authenticate transactions. So you can know that your big-ticket purchases are safe and secure, no matter how you’re paying for them.
Some banks do not charge a credit card EMI processing fee for converting purchases to an EMI (Equated Monthly Installment) payment plan. This can let customers save money by avoiding these types of fees.
However, if a bank charges an EMI processing fee, they may waive or forgo this fee during festive seasons or promotional periods. This can provide additional savings for customers who opt to pay for purchases over time through an EMI plan.
The icing on the cake is that some issuers waive the foreclosure charges if you pay off the outstanding EMI balance early. This allows you to pay things off at your own pace without worrying about penalties.
How the Credit Card EMI Works
Having a credit EMI card is like having a shopping buddy that lets you buy stuff now and pay for it later. When you use a credit EMI card, you’re borrowing money from the card company to make your purchase. You’ll then need to pay back that amount and any interest over time.
These cards usually come with a spending limit, the maximum amount you can borrow. The limit is based on factors like your credit score and income. The cool thing about credit EMI cards is that they often offer perks like cashback, rewards points, or discounts on purchases.
Using a credit EMI card responsibly can also help build your credit history, which is important if you ever want to take out loans or get other types of credit. Just remember to make your payments on time and keep your spending in check to avoid getting into debt.
How to Apply for EMI Card and Eligibility Criteria
Applying for an EMI-enabled credit card is straightforward. You would just need to apply for the credit card itself.
It’s important to understand that the EMI (Equated Monthly Installment) option on credit cards isn’t automatically available to everyone. Your bank or card issuer has to deem you eligible first, as EMIs are essentially viewed as a type of loan.
The issuer will evaluate your creditworthiness, looking at your credit score, income, debts, and repayment history. If they feel confident you can reliably make the monthly EMI payments, they’ll typically grant you access to this financing option.
However, if your financial profile doesn’t meet their standards, they may decide not to offer EMIs, even if it’s a card feature. Issuers have to balance providing flexibility with managing their own credit risk.
Once approved for the credit card, you’ll typically have the option to convert eligible purchases into EMI plans right at the time of purchase, either online, in-store or through the card issuer’s mobile app. The number of available EMI term lengths can differ based on the credit card and the purchase amount.
