RBL Bank Credit Card EMI

RBL Bank offers a convenient credit card EMI conversion feature known as “Split n Pay,” allowing cardholders to manage their high-value purchases by paying them off in installments. This option is particularly useful for those who need financial flexibility but may not have the funds to pay the full balance immediately. In this guide, we will dive into every detail of the RBL Credit Card EMI facility, outlining its benefits, drawbacks, fees, and much more.

What is RBL Credit Card EMI?

The RBL Credit Card EMI option allows users to convert their purchases into equated monthly installments (EMIs). This is useful for cardholders who want to avoid paying large amounts upfront. With the “Split n Pay” feature, RBL Bank credit cardholders can break down their purchases into smaller, more manageable payments over a set period.

Key details about RBL Credit Card EMI:

• EMI Interest Rate (Post-Purchase): Varies per user
• EMI Interest Rate for 1 Year (Merchant): Starts from 13% p.a.
• EMI Conversion Charges: Disclosed during the application process
• Pre-Closure Charges: 3% of the unpaid principal amount
• Minimum Transaction Amount: ₹3,000
• Tenure Options: 3, 6, 9, 12, 18, and 24 months

Pros and Cons of RBL Credit Card EMI Conversion

Benefits of RBL Credit Card EMI Conversion

1. Deferred Payments: The biggest advantage of RBL Bank’s Split n Pay is that cardholders can spread out payments for larger purchases. Instead of paying the entire amount in one go, users can defer their payment burden by converting their transaction into EMIs.
2. Low Financial Strain: Since the purchase amount is divided into smaller installments, the immediate strain on the user’s budget is considerably reduced. This feature is highly beneficial for salaried individuals who operate within tight financial margins.
3. Flexible Tenure Options: Cardholders have the flexibility to choose from multiple EMI tenures, ranging from 3 to 24 months, depending on what suits their financial planning.

Drawbacks of RBL Credit Card EMI Conversion

1. Interest Costs: Converting purchases into EMIs incurs interest, which starts at 13% p.a. While this is lower than standard credit card interest rates, it still adds to the overall cost of the purchase. The longer the tenure, the higher the total interest amount paid.
2. Blocked Credit Limit: When a transaction is converted into EMIs, the credit limit equivalent to the purchase amount is blocked. As users make their EMI payments, the credit limit is gradually unlocked. However, until that happens, the credit limit available for new purchases is reduced.
3. Increased Credit Utilization: The blocked credit limit affects the Credit Utilization Ratio (CUR). A higher CUR negatively impacts the cardholder’s credit score, and thus, users should be cautious about over-utilizing their available credit when converting to EMIs.

How to Opt for RBL Credit Card EMI Conversion

There are two primary methods to convert RBL credit card transactions into EMIs:

1. Merchant EMI Conversion: When making a purchase, cardholders can opt for EMI at the point of sale. This option is available for both online and in-store purchases, but only with participating merchants. For online purchases, users can select the ‘Pay via EMI’ option during checkout.
2. Post-Purchase EMI Conversion (Split n Pay): For purchases already made, cardholders can convert them into EMIs using the “Split n Pay” feature through the following channels:
   • Mobile App:
     • Log in to the RBL MyCard app.
     • Tap on “Convert Credit Card Transactions into EMI.”
     • Select the eligible transactions and choose the desired tenure.
     • Confirm the conversion.
   • SMS:
     • Send an SMS with the text “EMI” to 5607011.
   • Customer Care:
     • Call the RBL Credit Card Customer Care number available on the back of the card for assistance.

Fees and Charges for RBL Credit Card EMI Conversion

Understanding the various fees and charges involved with RBL Credit Card EMI conversion is crucial for making informed decisions. The primary costs include:

• Interest Rate: Starts from 13% p.a., based on tenure and user profile.
• Processing Fee: Varies and is disclosed at the time of application.
• GST: 18% applied on all fees and interest charges.
• Foreclosure Charges: 3% of the unpaid principal if the cardholder wishes to close the EMI early.

Things to Consider Before Opting for RBL Credit Card EMI

When considering converting a purchase into EMIs, certain factors need to be kept in mind to avoid unexpected costs or negative impacts on creditworthiness.

1. Choose the Right Tenure: Shorter tenure options, such as 3 or 6 months, may have a higher EMI per installment but will save you money on interest charges. Longer tenure options may offer lower monthly payments, but they increase the total interest payable.

   Example:

   • For a purchase of ₹20,000:
     • 3-month tenure at 25% p.a. interest results in ₹1,232.88 of interest.
     • 12-month tenure at 15% p.a. results in ₹3,000 of interest.

   The key takeaway is to balance EMI tenure based on your monthly cash flow and long-term cost implications.

2. Impact on Credit Limit: Since the credit limit is blocked for the entire purchase amount, users should factor in the reduced available limit for other purchases until the EMIs are fully paid.
3. Lost Rewards: Choosing Merchant EMI options could cause cardholders to forfeit one-time discounts or reward points that would have been earned with upfront payments. Consider this loss when evaluating EMI as a payment option.
4. Timely Payments: To avoid additional charges and maintain a good credit score, always make timely payments. Missed payments result in:
   • Loss of the interest-free period on your credit card.
   • Accrual of standard credit card interest rates on top of EMI interest, significantly increasing the amount owed.
   • A negative impact on your credit score, which can affect your ability to secure future loans or credit.