How does a credit card EMI work?

Credit card EMI allows you to convert high-value purchases into manageable monthly instalments. When you opt for this facility, the bank pays the merchant upfront and blocks an equivalent amount from your credit limit. You repay this amount over a fixed tenure, usually 3 to 24 months, with added interest and a one-time processing fee. As you pay each EMI, your credit limit is progressively restored. Some merchants also offer no-cost EMI, where the interest component is provided as an upfront discount.