New Delhi: Diwali shopping is at its peak, with Dhanteras celebrations having concluded on November 6 and Diwali scheduled for November 8. As people prepare for the festival, spending on clothes, gifts, electronics, crackers and other household items is increasing. However, without proper financial planning, festive purchases can put considerable pressure on monthly budgets.
Many shoppers prefer using credit cards while purchasing products through popular e-commerce platforms. When the total bill becomes difficult to pay at once, converting the purchase into monthly instalments can appear to be a convenient solution.
This is where credit card EMI facilities, particularly no-cost EMI offers, attract attention. They allow customers to divide large payments into smaller instalments over a selected repayment period.
However, the term ‘no-cost EMI’ does not always mean that the purchase comes without additional expenses. Processing fees, applicable GST, other charges and discounts that customers may lose by choosing EMI can increase the overall cost.
Before converting your Diwali shopping bill into monthly instalments, it is important to understand the possible expenses involved.
No-Cost EMI: What Are the Hidden Charges?
A no-cost EMI offer may look attractive because customers do not have to pay the entire purchase amount immediately. However, certain charges can still apply depending on the bank, credit card issuer, retailer and terms of the offer.
Here are some important costs to check before choosing this payment option.
1. Processing Fees: Banks and credit card issuers may charge a processing fee when a transaction is converted into EMI. This amount can increase the total cost of your purchase.
2. GST on Applicable Charges: GST may apply to processing fees and other eligible charges. Customers should check the tax component before confirming their EMI transaction.
3. Other Associated Charges: Some EMI offers may include additional expenses depending on the card issuer and repayment conditions. Always review the complete fee structure rather than relying only on the advertised offer.
4. Loss of Upfront Discounts: Certain retailers provide discounts for customers making full payments. When you select an EMI option, you may lose access to these offers, making the final purchase more expensive.
5. Overall Repayment Cost: The total amount payable throughout the EMI tenure should be compared with the original purchase price. Even when monthly instalments appear affordable, additional charges and lost discounts can increase the actual expense.
<text color=”secondary” size=”xs”>Note: These charges are not applicable to every no-cost EMI offer. The actual costs depend on the bank, card issuer, retailer and specific offer conditions.</text>
Plan Your Diwali Shopping Before Choosing Credit Card EMI
Before converting festive purchases into EMIs, compare the complete cost of buying a product through instalments with the amount required for an upfront payment.
Check the product’s final selling price, processing fees, applicable taxes, additional charges and any discounts that may not be available on EMI transactions. The repayment period should also be considered before making a decision.
It is equally important to keep your overall financial commitments under control. Avoid converting every festive purchase into an EMI simply because the facility is available.
Calculate your existing monthly instalments and essential household expenses before deciding how much additional repayment you can comfortably manage.
Is No-Cost EMI Really Worth It?
A no-cost EMI offer can be useful when it allows you to manage a large purchase without creating unnecessary financial pressure. However, the decision should depend on the actual amount payable rather than the advertised monthly instalment.
A smaller EMI does not necessarily mean that a product is cheaper. If processing charges, taxes or lost discounts increase the total expense, paying the full amount upfront may prove to be a better option.
Ultimately, the smartest Diwali purchase is one that meets your actual needs, fits your budget and does not create a repayment burden after the festive season ends.
Disclaimer: This article is intended for general informational purposes only and does not constitute financial advice. Credit card EMI charges, processing fees, taxes and repayment conditions vary between banks, card issuers and retailers. Customers should carefully review the applicable terms and calculate the total repayment amount before opting for a no-cost EMI facility.