How to buy a phone on EMI?

Buying a phone on EMI (Equated Monthly Instalments) with a credit card is a popular financing option that allows you to spread the cost of the device over a period of time, making it more affordable. This guide will walk you through the steps to buy a phone on EMI with a credit card, explain the benefits, and answer common questions about the process.

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Understanding EMI

What is EMI?

EMI stands for Equated Monthly Instalments, which means breaking down the total cost of a purchase into smaller, manageable monthly payments over a specified period. When you buy a phone on EMI using your credit card, the credit card issuer pays the full amount to the retailer, and you repay the issuer in monthly instalments.

Types of EMI Plans

Credit card EMI plans typically come in two forms:

• No-Cost EMI: You only pay the actual cost of the phone divided over several months without any additional interest or fees.
• Standard EMI: You pay the cost of the phone plus interest, which is divided into monthly payments.

Read more: 5 ways to make the most of your credit card

Steps to Buy a Phone on EMI with a Credit Card

Step 1: Check Eligibility

Before you start, ensure that your credit card issuer offers EMI options. Not all credit cards support EMI transactions. You can check this by logging into your credit card account online or by contacting your bank’s customer service.

Step 2: Choose Your Phone

Select the phone you want to purchase. This can be done through various channels:

• Online Retailers: Websites like Amazon, Flipkart, and other e-commerce platforms often provide EMI options.
• Physical Stores: Many electronic stores offer EMI options on purchases made with credit cards.

Step 3: Select EMI Option

When you reach the payment stage:

• Online Purchase: Choose the EMI option during checkout. You will usually see different tenure options (e.g., 3, 6, 9, 12 months). Select the one that suits your financial planning.
• In-Store Purchase: Inform the cashier or sales representative that you want to use the EMI option with your credit card. They will guide you through the process.

Step 4: Complete the Transaction

Once you’ve selected the EMI option:

• Enter your credit card details if purchasing online, or swipe your card if buying in-store.
• Confirm the transaction and ensure the EMI plan is correctly applied. The first instalment will typically reflect on your next credit card statement.

Read more: How long does it take to improve your credit score?

Benefits of Buying a Phone on EMI with a Credit Card

Manageable Payments

EMI allows you to break down the cost of an expensive phone into smaller, more manageable payments, reducing the immediate financial burden.

No-Cost EMI Options

Many retailers and banks offer no-cost EMI options, meaning you can spread the cost without paying extra interest.

Build Credit History

Making timely payments on your EMI plan can help build and improve your credit score, showcasing responsible credit usage.

Immediate Ownership

You can own and start using the latest phone immediately without waiting to save up the entire amount.

Read more: How to improve your credit score – complete guide

Things to Consider

Interest Rates

While no-cost EMI is attractive, some EMI plans come with interest rates. It’s essential to understand the total cost you’ll be paying over the period.

Processing Fees

Some banks charge a one-time processing fee for converting a transaction into EMI. Check with your bank for any additional charges.

Credit Limit

The total cost of the phone will be blocked on your credit card limit initially and will be released gradually as you repay the EMI. Ensure you have a sufficient credit limit before making the purchase.

Prepayment and Foreclosure

Some banks allow you to prepay or foreclose your EMI plan but may charge a penalty for doing so. Check the terms and conditions of your EMI plan.

Read more: Credit card or personal loan – which is the better option?

FAQs About Buying a Phone on EMI with a Credit Card

Q1: Can I buy any phone on EMI with a credit card?

Not all phones may be available for EMI options. It depends on the retailer and your credit card issuer. Check with both parties before making a purchase.

Q2: How is the EMI amount calculated?

The EMI amount is calculated based on the phone’s cost, the tenure of the EMI plan, and the interest rate (if applicable). Online calculators are often available on bank websites to help you estimate the EMI.

Q3: Will opting for EMI affect my credit score?

Opting for EMI itself does not affect your credit score. However, timely repayment of EMIs can positively impact your score, while missed payments can negatively affect it.

Q4: Can I convert an existing credit card purchase into EMI?

Yes, many banks offer the option to convert an existing purchase into EMI within a specific period after the transaction. Contact your bank to check if this service is available and the associated terms.

Q5: What happens if I miss an EMI payment?

Missing an EMI payment can lead to late fees and interest charges. It can also negatively impact your credit score. Ensure you have enough funds to make timely payments.

Buying a phone on EMI with a credit card is a convenient way to manage the cost of a new device. By breaking down the total amount into smaller, manageable payments, you can afford the phone you want without straining your finances. Ensure you understand the terms of your EMI plan, including any interest rates and fees, and make timely payments to maintain a good credit score. With careful planning, you can enjoy your new phone while keeping your budget in check.