EMI Card vs No Cost EMI Offers: What’s Better for Festive Shopping?

While the EMI card and No Cost EMIs both spread out your payments in instalments, they function differently. In a nutshell, EMI cards require pre-application and have applicable interest, while No Cost EMIs are approved on the spot with no visible interest rates. Let’s take a closer look at the differences between these popular financing options and decide which suits festive shopping more.

What Are EMI Cards?

An EMI card is a product that allows you to convert your purchase amount into fixed monthly instalments. To obtain an EMI card, you must apply through the online portal of an NBFC or a bank. Approval depends on your eligibility and credit score. The application typically requires proof of ID, income, and address.

You then get a pre-approved amount on your card that you can use as many times as you want until you reach the limit; each time, the amount you use is converted to EMIs. EMI cards are generally accepted at partner stores and are valid throughout the tenure. Additionally, most EMI cards have relatively lower interest rates but may charge a small processing fee.

Also Read: How to Use an EMI Card for Online and Offline Shopping

What are No-Cost EMIs, and How Do They Work?

No Cost EMI offers let you pay for your purchase in instalments without visible interest charges. Here, the interest cost is covered by the seller or rolled into the product price.

No-cost EMI offers are commonly promoted during festive sales. To opt for a No-Cost EMI, simply choose the option at checkout; no separate application is needed. Payments are spread over a tenure such as three, six, or twelve months. It’s vital to complete payments on time; otherwise, you risk losing the benefit offered by the EMI.

However, hidden charges can appear in No Cost EMI offers. For example, processing fees or Goods and Services Tax (GST) on interest amounts may still be passed on to you. Lastly, late payments could attract penalties or interest, negating the advantages it would have offered.

Also Read: How to Use an EMI Card for Online and Offline Shopping

No Cost EMI Offers vs EMI Cards: A Glimpse

Which Option Should You Choose for Festive Shopping?

Here’s a breakdown of when to consider each option:

EMI Card

According to a study reported by Financial Express, over 40% of borrowers favour EMI cards thanks to their speed and accessibility. If you prefer flexibility and want the ability to spread your payments across various purchases over this festive season, an EMI card is the better option.

Here’s why:

•    Flexibility: With an EMI card, you have a broad limit within which you can make controlled payments, each of which is broken down into fixed monthly instalments.
•    Convenience: No need to keep reapplying for a Consumer Durable Loan with every single purchase; the pre-approved limit on your EMI card means all you need to do is enter its details to take home your new products.

No Cost EMI Offers

If you’re eyeing a few specific items that offer No Cost EMIs during a festival sale, you can skip the EMI card and stick with No Cost EMIs. 
Here’s why:

•    Zero Visible Interest: With No Cost EMI offers, the retailer absorbs the interest charges or includes them in the product price, which can be beneficial once you confirm that there are no hidden charges.
•    Simple Process: No pre-application or approval timeline is needed. Just select the No Cost EMI option at the checkout counter.

Ensure you double-check for hidden fees, such as GST or processing fees, which can negate the benefit of the No Cost EMI. Additionally, be cautious of the repayment terms; any missed payments could result in penalties or interest charges, potentially making it costlier than expected.

Also Read: How EMI Cards Can Help Improve Your Credit Score

To Conclude

EMI cards and No Cost EMI offer both make festive shopping easier by allowing instalment payments. But your choice of payment depends on product availability, your eligibility, your purchase plan, and the comparison of total costs. Understanding these differences enables you to manage your spending with confidence.

For flexible and transparent solutions tailored to your needs, consider Poonawalla Fincorp’s PIFN EMI Card today.

FAQs

How do I apply for an EMI card online?

To apply for an EMI card, visit the NBFC or retailer’s website, submit necessary documents like proof of identity, address, and income, and meet the eligibility criteria to get approved.

Can I use an EMI card at any store?

No, EMI cards can only be used at partner stores that accept the card; this limits their flexibility compared to other payment options.

What hidden charges should I watch for in No Cost EMI plans?

Hidden charges in No Cost EMI plans may include processing fees, GST on interest amounts, or higher product pricing, which can reduce the overall savings.

Which is better for electronics purchases: EMI card or No Cost EMI?

The choice between an EMI card and No Cost EMI depends on factors such as the retailer’s offers, the product’s price, and the overall cost, including any hidden fees.