When To Use Credit Card EMI and When to Avoid

By OneCard   |   January 16, 2024

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EMI is one of the most beloved features of credit cards. After all, who doesn’t love to have some affordability, especially when making big purchases? While the flexibility of paying for your dreams in parts is appealing, there are some potential pitfalls to it that you need to be aware of. So, if you are wondering whether or not you should use EMI on credit card, this blog is for you!

When to Opt for Credit Card EMI

Following are some common situations when it can be a good idea to opt for EMI on credit card:

1.When you are looking for affordability

If you are making a big purchase and don’t have sufficient funds at the moment, paying for it in parts can make it more affordable. It is important to consider the charges, if any, associated with such a purchase. If the interest amount is not too high as compared to the overall price of the product, then getting it on EMI can be a good idea.

2.When the interest charges are nil or very low

Let’s say you want to buy a MacBook and it is available at a 6 month no-cost EMI. Instead of spending the entire amount in one go, you can buy it comfortably by paying for it over a period of six months. The only extra charge you will need to pay is the EMI processing fee, which is typically Rs. 199.

3.When you want to maintain your cash balance

Even if you can afford to pay upfront for a product, you may not want to spend all the cash you have. In such cases, buying the product on EMI can allow you to retain your cash balance for emergencies.

When to Avoid Credit Card EMI

While EMI on credit cards can be a great option, here are some instances where not opting for it can be a smarter decision:

1.The interest charges are very high

Not all products may be available at a no-cost EMI. In the case of standard EMI, the interest charges can get really high if you take an EMI for a long duration or if the issuing bank charges high interest rates. In such cases, it may not be a wise decision to opt for a credit card EMI.

2.If you want to avoid overspending

Although EMI on credit cards allows you to pay for big purchases in parts, sometimes it may lead to overspending. If you have too many EMIs, or if the EMI amount is too high, you may struggle to repay it on time. EMIs need to be paid on time every month; failing to do so may negatively impact your credit profile. So, even if something is available on EMI, you should carefully think about the repayment before buying it.

Things to Keep in Mind Before Opting for Credit Card EMI

If you are choosing to go with credit card EMI, here are some important things to consider:

1.Compare offers across stores and platforms

Go through offer details across various online platforms and stores to check if an EMI offer is available on the product and, particularly, if a no-cost EMI option is available. Even if you search for the product on Google, you will be able to see the prices and offers across all popular platforms. But always shop on known platforms, even if the price is a little higher than on platforms you have never heard of.

2.Check the interest rates and additional charges, if any

Always go through the detailed price breakdown before making an EMI purchase. Check the interest rates across various cards, availability rewards and cashback offers, and the EMI processing fee.

3.Check your available credit limit

The moment you purchase something on EMI, the entire purchase amount will be immediately blocked from your card’s credit limit. So, you need to ensure that you have enough available credit limit before making the purchase. For example, if you are purchasing something worth Rs. 50,000, you need to have an available credit limit that is higher than Rs. 50,000 and preferably much higher, so you don’t impact your credit utilisation ratio.

4.Choose an optimal repayment period

While it may be tempting to choose a higher repayment tenure, it also leads to higher interest charges. On the other hand, choosing a very low tenure can increase your monthly EMI burden. Most of the time, no-cost EMI is available only for a 6 month tenure. So it is prudent to analyse the costs and benefits before choosing a repayment period.

Experience best in class EMI feature with OneCard

The OneCard app has made the entire experience of using EMI on credit cards as simple as it can get, yet delightful. Here’s how:

Transaction EMI

When buying something expensive, you can choose to pay for it in installments if you do not want to pay the full amount right away. Just pick a transaction that is eligible,check the applicable fees, and click on ‘Convert to EMI’. You don’t need to make any calls or write emails to convert your transaction to EMI.

Bill to EMI

As the due date for your credit card bill gets closer, if you do not have enough money, pay the minimum amount due or any amount you choose, and then convert the rest into EMI. Choose your preferred tenure from the given options, check the applicable fees, and click on ‘Convert to EMI’.

Transparency at its finest

In any EMI conversion, all the applicable charges are displayed up front. There is no need to go through the fine print of the terms and conditions, so you can use EMI confidently and conveniently.


Here are some commonly asked questions about using EMI on a credit card.

1. Is it good to take EMI on a credit card?

Using EMI on credit card is a personal choice and depends on factors such as affordability, interest rate, and applicable offers. Evaluate all the pros and cons of every purchase situation before opting for the EMI on credit card facility.

2. Is it good to buy a phone with EMI on a credit card?

Most high end smart phones cost more than Rs. 20,000 in India. Purchasing them in one-shot can be financially burdensome. If there is a no-cost EMI available on your card, or if you must buy it immediately and don’t have the entire funds, you can buy it on EMI with your credit card.

3. Is it better to buy things on EMI or with full payment?

Whether or not to use EMI for purchasing something entirely depends on your financial situation and the offer at hand. If you want to make your purchase more affordable and have a good offer on the EMI purchase, you can go ahead or else opt for a full payment.

4. Does buying things on credit card EMI affect your credit score?

Buying things on EMI doesn’t directly affect your credit score. However, if you buy something on EMI, typically the value is high. Suppose you purchase something worth Rs. 50,000 on EMI and your credit limit is Rs. 70,000, then your credit limit of Rs. 50,000 will be blocked and gradually released as you pay EMIs. This can affect your credit utilisation ratio. As long as you make timely payments, opting for credit card EMIs should have a positive impact on your credit score.

ALSO READ: How To Use Your OneCard to Build Your Credit Score

**Disclaimer: The information provided in this webpage does not, and is not intended to, constitute any kind of advice; instead, all the information available here is for general informational purposes only. FPL Technologies Private Limited and the author shall not be responsible for any direct/indirect/damages/loss incurred by the reader for making any decision based on the contents and information. Please consult your advisor before making any decision.