How Does Credit Card Emi Works?

Guide to EMI on credit cards

Planning to make a large purchase but facing a cash crunch?

Consider buying with a credit card and paying off the dues in monthly installments.

Here is our guide to EMIs on credit cards.

How do EMIs on credit cards work?

Some card issuing banks offer customers the option of paying their bills in EMIs (equated monthly installments).

The EMI option is applicable on selected purchases or your total outstanding.

Some banks may even call you soon after a large transaction offering the EMI option.

Interest rates

Some banks offer interest-free EMIs on certain products when bought from a specific retailer. These are often a good bargain.

In most cases, you will need to pay interest on the EMIs. The interest rates are generally lower than the credit card interest rates.

Processing charges or other fees may be applicable.


Tenures for credit card EMIs range from three to 18 months.

How EMIs affect your credit card

You will have a lower credit limit, as the bank will reduce your limit by the amount of your EMI.

Your minimum payment due every month will be higher, by the amount of your EMI.

Try to settle the outstanding amount, including your EMI, in full every month.

How to decide

If you need more than three months to repay the outstanding, opt for EMIs.

If you need less than three months, then you should avoid EMIs, as revolving credit can multiply your debt quickly.

Also look for alternative options to fund your purchase.

Alternatives to EMIs on credit card

If you have a large outstanding and need a few months to repay, you should compare interest rates with a personal loan.

If you are a regular bank customer with a good track record, the officer may offer you a lower interest rate.