GUIDESCREDIT CARDS
How Safe Are No-Cost EMI Plans On Credit Cards?
5 MIN • 
LAST EDITED BY ANOOP MENON ON APRIL 23, 2025.
LAST EDITED BY ANOOP MENON ON APRIL 23, 2025.
GUIDES LAST EDITED BY ANOOP MENON ON APRIL 23, 2025.
No-cost EMI plans on credit cards are a popular choice in India's e-commerce marketplaces. However, it's essential to understand that the concept of 0% interest is non-existent, as explained in a 2013 government circular. So, the interest cost, in one way or the other, falls on the customers.
Is it smart to use no-cost EMI plans? Is it safe ? Keep reading to find out!
No-cost EMI plans on credit cards allow you to buy high-end products without paying any additional interest. E-commerce platforms provide no-cost EMI plans with interest (typically 15%), but that's added elsewhere. Let's say you want to buy a smartphone for ₹30,000. If you select a three-month, interest-free EMI plan with a 15% interest rate, you will be required to pay ₹4,500 in interest. There are usually two plans & let's use a phone as the purchased item:
To purchase a product using EMI, follow these steps:
With a regular EMI, the EMI amount would consist of the processing fees and the interest component. The difference when it comes to no-cost EMI is that there is no interest component taken into account.
By receiving an additional discount, you are getting a fantastic deal. But, you should only go ahead with the purchase if no-cost EMI on a credit card is a suitable alternative. Opt for it, if:
No-cost EMI plans on credit cards can be a great option if you want to buy expensive items over time without paying the full amount upfront. But keep in mind that the idea of 0% interest is not real, and interest costs are usually added in some other way. So it's important to decide if a no-cost EMI plan is the right choice for you and to use it responsibly, as missed payments could lower your credit score. Also, make sure to compare different payment methods and consider all payment options before selecting the EMI option that works best for your financial situation.
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This payment option allows buyers to purchase expensive items online and pay in monthly instalments instead of the full amount. While it's easier to spread out payments over several months, buyers end up paying more than the product's actual price.
To avail of no-cost EMI, contact your bank and go through the procedure as per the instructions.
Yes, converting credit card bills into EMIs or taking on EMI-based plans is perfectly acceptable, but it's essential to make sure you borrow the amount for a brief period and pay it back on time, without delays.
Similar to a loan, failure to pay EMIs will have an adverse effect on your credit report and credit score. Lenders take this negative impact into account when evaluating your loan applications. Therefore, it is crucial to practice financial discipline even when choosing no-cost EMIs.
The primary drawback of an EMI is its potential costliness. This is due to the borrower being obligated to pay an added interest on the entire loan amount, regardless of how small the actual borrowed sum may be.
