Detail Guide On Credit Card EMI in Festival Shopping

Detail Guide On Credit Card EMI in Festival Shopping

Written by djsmith, In Finance, Published On
May 2, 2024

India is a land of Festivals, synonymous with celebration and shopping. During the festive season, online and offline shops attempt to win consumers by offering excellent discounts. Some people like purchasing things through credit cards on EMIs during the festive season. While the credit card EMI options are viable, you should avoid unnecessary debt during your shopping spree. Please read the article to learn essential details about how credit card EMI works so you can make the most of it.

How Does Credit Card EMI Option Work?

The credit card EMI functions similarly to an ordinary loan. The interest and processing fees will be charged. You determine the repayment period, usually lasting between three and twelve months. However, this conversion doesn’t come without a price; you can use a credit card EMI calculator to calculate this cost.

Users can convert their credit card transactions into EMIs in two ways:

  • Instant EMI conversion on e-commerce portals: Several vendors offer this option at the time of purchase. You can convert the total product amount into EMIs for a specific duration.
  • Conversion of transaction amount into EMI: Customers can ask the card issuer to convert the total amount into EMIs to be repaid over a specific tenure.

Costs associated with EMI scheme

The EMI scheme incurs several costs for users:

  • Transaction Fee: When converting a transaction to EMI on Kotak, a one-time fee of up to 3.5% is levied. The exact amount will be displayed on the screen when you choose the EMI option for your purchase.
  • Interest Rate: Interest rates fluctuate from 15% to 22% p.a. on reducing balance.
  • Applicable Taxes: Taxes are levied on charges and interest. This forms the minimum amount due.
  • Pre-closure Penalties: If you settle the entire amount before the full duration, you will have to pay pre-closure penalties.
Also Read -   Top 10 Reasons Why You Should Learn Programming

Important Credit Card EMI details

Before choosing the credit card EMI option, consider these factors:

  • Please read the fine print thoroughly to understand the terms, as card companies can change them at their discretion.
  • Check if the total payment (EMIs + down payment) equals the product’s MRP.
  • Consider pre-closure penalties. Several credit cards impose these charges. Select a card with zero pre-closure fees.
  • Evaluate how the EMI scheme affects your credit limit. It decreases with the outstanding EMI amount but increases with each payment.
  • Be aware that EMI may lower your credit score due to the increased Credit Utilisation Ratio (CUR), which impacts creditworthiness.

Credit card EMI benefits

The credit card EMI option provides several benefits for festival shopping and beyond:

  • Pay in several installments according to your ability to avoid being financially burdened.
  • They have the benefit of either a 3 to 36-month repayment period.
  • Many lenders provide the option of no-cost EMI, bypassing interest charges.
  • Expand your buying power by paying overtime for expensive products.
  • Preserve liquidity by protecting cash flow and savings for future expenses.
  • A higher ability to purchase things allows you to buy items you may not be able to afford all at once.
  • Improve credit score through demonstration of creditworthy behavior and regular on-time payments.
  • Use discounts and special offers from credit card issuers during festive seasons.
  • Simplify the budgeting process with fixed monthly payments.
  • Ease convenience by skipping the burden of compulsory lump-sum payments.
  • Relish your shopping experience with transparent terms and conditions, and enjoy a hassle-free purchase process.
Also Read -   Wells Fargo Flex Loans: A Comprehensive 2024 Review


Festive shopping can be rewarding if you do it right. It would be best to start by setting up a budget to guide you wisely when you spend. You must pick a credit card that is the perfect fit for your needs. Recognizing your credit limit turns off the situation of overspending and the potential mental stress of it as well. Practice coupon clipping, promo codes, and loyalty plans to get the most out of your savings. Check your credit card EMI interest rate before you start spending. The Kotak 811 credit card comes with various features and attractive interest rates. Apply for a credit now as a reward for a festive shopping experience.

Related articles
Join the discussion!