The use of credit cards has increased rapidly in the last few years . The maximum number of people using credit cards are youngsters. It has been observed that the cases of bill defaults after purchases made using credit cards have also increased rapidly. This is spoiling the CIBIL scores of people. To avoid such cases, converting the credit card balance into EMI is a good option. Let us know how you can convert your big credit card bill into easy EMI.

How to convert credit card balance into EMI

1. Internet Banking

Log in to your internet banking account. Select the ‘Convert to EMI’ option under the Credit Card section. Most banks offer this facility under the Credit Card Management section. Once selected, you will be shown different tenure options and interest rates applicable on your outstanding balance. Review the terms and conditions carefully before proceeding. Some banks may charge a processing fee for EMI. Once you choose your EMI option, the monthly installments will appear in your billing cycle.

2. SMS Request

Send an SMS to the official number of your bank. You will receive a call from the bank to confirm the EMI. Many banks provide a pre-defined format for requesting EMI via SMS. For example, you may have to send a specific code along with your card number to the specified banking number. After receiving your request, a bank representative will contact you to discuss the available EMI options. This method is convenient for those who do not have internet access.

3. Banking apps

Most banks provide banking app facility to their credit card users. You can easily convert the outstanding amount on your credit bill into EMI through this app in a few seconds. You will see different EMI options on the app. You can convert the outstanding amount into EMI by choosing the option as per your convenience.

4. Customer Care

You can also contact the bank’s customer care and provide your card details and request them to convert it to EMI. The representative will guide you about the available EMI schemes and applicable interest rates. Make sure you have your credit card details with you before calling. Some banks may require additional verification for security purposes. Once your EMI request is approved, you will receive a confirmation message and a billing statement. This method is ideal for those who prefer to speak to a bank representative directly.

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There are only a few days left for the month of June to end. From July 1, all credit card bill payments should be made through Bharat Bill Payment System i.e. BBPS. Its purpose is to streamline the payment process and increase its security. There may be difficulty in credit card bill payment through some platforms. These include some major fintechs like CRED, PhonePe, BillDesk. In fact, the Reserve Bank of India has directed that after June 30, all credit card payments should be processed through Bharat Bill Payment System.

Some banks have not activated it

According to the report, HDFC Bank, ICICI Bank and Axis Bank have not activated BBPS yet. These banks have not even followed the instructions yet. So far only 8 banks have activated bill payment on BBPS.

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What is BBPS

Bharat Bill Payment System (BBPS) is an integrated system of bill payment, which provides online bill payment service to customers. It is an interoperable platform for bill payment. This system works under the National Payments Corporation of India i.e. NPCI. Like UPI and RuPay, BBPS has also been created by the National Payments Corporation of India (NPCI). Bharat Bill-Pay is an interface, which is available on apps like Cred, PhonePe, BillDesk, Bhim, Paytm, Mobikwik. Through this, all bills can be paid on a single platform.

Request for extension of time limit

So far 26 banks have not enabled it. The payment industry has demanded an extension of the deadline by 90 days. The Payments Council of India has filed a petition with the RBI in this matter. However, the regulator has not yet taken any decision on this.

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Credit card bill payments through the platforms of PhonePe, Cred, BillDesk will be affected. The Reserve Bank of India (RBI) had earlier directed that all credit card payments after June 30 should be processed through the Bharat Bill Payment System (BBPS).

So far HDFC Bank, ICICI Bank and Axis Bank have not activated BBPS. These banks have issued a total of more than 5 crore credit cards to customers.

However, these banks have not yet complied with the instructions. Fintechs like PhonePe and Credi, which are already members of BBPS, will also not be able to process payments on credit card dues for them after June 30. Therefore, banks need to follow the rules for these fintechs to operate without any hassle. These rules of RBI are valid till June 30.

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According to the report, the payment industry has demanded to extend the deadline to 90 days. So far, only 8 banks have activated bill payments on BBPS, while a total of 34 banks are allowed to issue credit cards. The list of banks that have activated BBPS includes SBI Card, BOB Card, IndusInd Bank, Federal Bank and Kotak Mahindra Bank. According to the industry, apart from allowing the central bank to track and resolve fraudulent transactions, RBI needs to keep an eye on payment trends.

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Let us tell you that there is a due date for paying the credit card bill. After the bill is issued, you have to pay the bill by that date. If you do not do this, you have to pay the penalty and there is a risk of bad credit score.

Many times people forget to pay the credit card bill on the due date. In such a situation, they are afraid of getting bad credit score. However, even after the due date, you get the facility to pay the credit card bill without penalty and your credit score does not get affected. Let us know what RBI rules say about this.

Last year, the Reserve Bank had implemented a new rule regarding credit card bill payment. In which provision has been made for bill payment without penalty even after the due date of bill payment. According to this rule, the credit card holder can pay the credit card bill without penalty for 3 days even after the due date, that is, if you have forgotten to pay your credit card bill on the due date, then in the next 3 days without extra money You can pay the given bills.

Credit score will not be affected for 3 days, according to the rules of the Reserve Bank, if you pay your credit card bill for the next 3 days after the due date, then you will neither have to pay any penalty nor will it affect your credit score. . In such a situation, if you forget to pay the credit card bill on due date in a month or the money is not arranged on time, then you will not have to worry for 3 days.

If you do not pay the credit card bill even after 3 days of the due date, then the company will charge you a penalty . The amount of penalty depends on your credit card bill. If your bill is high then you will have to pay more penalty and if it is less then accordingly less penalty will get your work done.

For example, State Bank charges a penalty of Rs 400 on a bill of Rs 500 to Rs 1,000. At the same time, it charges a penalty of Rs 750 for an amount of Rs 1,000 to 10,000 and Rs 950 for a bill of Rs 10,000 to 25,000.

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The Reserve Bank has issued new instructions for banks and card issuers regarding the payment of credit card bills. Under this, it has been said that the calculation of Minimum Amount Due should be done in such a way that there is no negative amortization. RBI has said in its directive that unpaid charges, levies and taxes will not be compounded for interest. Explain that the Reserve Bank had implemented this rule from 1 October 2022.

According to Sachin Vasudev, Director and Head of Cards, Paisabazaar, under the new rule, credit card issuers will have to fix a minimum amount so that the total outstanding amount can be paid within a reasonable time. Also, finance charges, penalties and taxes applicable on the outstanding amount will not be capitalized in the next statement. It means to say that once the outstanding amount is paid, the rest of the charges will not have to be paid.

How will the new rule related to credit card work?

If a person pays only the minimum amount due on a credit card bill, interest will be charged on the outstanding amount and all new transactions until the previous due amount is paid in full. The interest calculation on the credit card outstanding amount will be something like this. (number of days counted from the date of transaction x outstanding amount x interest rate per month x 12 months)/365.

Understand with example:

Let us assume that your credit card bill comes on 10th of the month. But you spent Rs 10,000 on the first of the month. Your bill due date is 25th of the month and you pay minimum due amount of Rs.500. Now interest for the next bill will be calculated on the outstanding amount of Rs 9,500 for 40 days, that is, from the date of expenditure till the date of the second bill.

Expense. If you pay only the minimum amount every month, interest will be calculated on interest every month. In such a situation, it may also happen that due to high interest, in the coming months, the amount of interest will be more than the minimum amount.

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