25 OCTOBER, 2022

One of the most unbeatable perks of owning a credit card is the ease of repaying your transactions later. The best part is that cardholders can easily convert credit card bills to EMI and flexibly pay off their purchases. Thus, making expensive purchases and paying them off at their convenience is an important advantage that credit card holders can enjoy. That being said, you might be wondering if converting credit card EMIs is an intelligent choice. Here are some of the most exciting perks of converting your credit card payments into EMI. 

Perks of Converting Credit Card Transactions Into EMIs 

Credit Score Remains Unaffected  

After knowing how to convert credit card bills into EMI, you can easily convert your outstanding balance into monthly instalments. The best part is, doing so won’t affect your credit scores. Regular and timely payments may boost your score in the longer term. And a good credit profile, as everyone knows, is crucial in ensuring various benefits, such as availing of loans, extending your limit, and so on. 

Flexible Financing Options 

Additionally, converting credit card transactions is useful because when you choose the EMI mode for payment, you can also choose a particular number of months over which you wish to make your payments. Cardholders can keep track of their finances much more efficiently with this ability. This can help ease stress as you will have a flexible amount of time to make payments for even the most expensive purchases. This makes for a great way to manage your funds. 

Maximum Flexibility in Repayment Duration

Another one of the reasons why most people prefer to convert credit card bills to EMI is because they can choose the range of repayment period, which can range from 3, 6, 9, 12 months, and so on. 

Many banks even extend up to 36 months of EMI repayments. This flexibility of instantly buying something and paying for it in extended durations appeals to customers. Nonetheless, with this duration comes an interest rate. 

Customers are usually advised to convert their online credit card payments into smaller duration EMIs, so they don't pay too much interest. Moreover, other elements, such as late fees, may be applied if you pay after your repayment term. 

This is why turning credit card payments into EMIs is an outstanding option if you are smart enough to manage your finances and pay back your bills carefully.

Nonetheless, categorising your payment into a relevant payback tenure is extremely crucial if you want to ensure you don't become subject to various fees such as over-limit fees or fees for late payment.  

You Can Avail No-Cost EMI Schemes 

You may have already heard of the term No-Cost EMI. One of the many benefits of credit cards is that many lenders offer a no-cost EMI option to help you repay your bills and purchases. Similar to the standard EMI processes, no-cost EMIs are charged at a monthly tenure, except they don't charge you interest on the principal amount. This makes it much more convenient for cardholders who don't want to pay too much interest. Moreover, it is much more feasible for every individual to make an expensive purchase as they don't have to pay up all at once.

  • No-cost EMI schemes generally wave off the interest that you may need to potentially pay for your purchases as it is offered in terms of a discount. 
  • The merchant generally pays the interest cost, allowing you only to pay the product's original price. This is beneficial to avoid paying excessive interest rates as all you'll have to pay are the processing fees. 
  • That being said, you will be charged with GST levied on the respective transaction.
  • Many card providers also offer cashback, discounts, and reward points to avail of no-cost EMIs, depending on the merchant whose products you buy. 
  • No-cost EMIs allow you to pay the instalment amount without hidden costs, although you should always check on these. 

Limited Paperwork

Last but not least, converting your online credit card payments into EMIs calls for minimal or, in some cases, zero paperwork. You don't have to undergo excessive paperwork to turn your transactions into EMIs. You can make expensive purchases without feeling too anxious about needing a significant amount of documentation. 

Things to Take Note of When Converting Payments into EMI 

  • Choosing the suitable tenure is crucial to ensure that you can make timely payments at your convenience. Try and avoid paying excessive interest. Make sure that you choose a significantly smaller payment tenure. 
  • Try and compare distinguishing options if you're someone who owns different credit cards. Check the interest rates and choose the right credit card for making payments if you want a lower interest rate. 
  • When converting your credit card purchases into EMIs, your credit card limit might be reduced until you make the EMI payments. The limit will thus increase as and when you make the payments. 
  • In rare circumstances, EMI conversions might result in losing your reward points. Thus, if the reward points you have range drastically high, make sure you use up these points to save potential money you may spend on various purchases.
  • Lastly, you must make timely payments to avoid being charged penalties. 

Bottom Line 

You can convert your transactions into EMIs and make your life simple. However, choosing a suitable tenure and paying back your purchases on time is crucial to ensure the best utilisation of your credit card. These were some of the top benefits of converting credit card payments into EMIs. Using a credit card EMI Calculator is always a good idea to analyse how much you'll have to pay monthly to manage your funds efficiently. 

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.