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Ansh Kadam
Founder & CEO at Bui... • 21d
Is your bank doing charity by offering you a No-Cost EMI? Absolutely not. RBI itself has made it clear — 0% interest does not exist. Yet banks, brands, and e-commerce platforms continue to aggressively market no-cost EMI offers like they’re doing you a favor. So how do they actually make money? Let’s break it down. First, No-Cost EMI is a brilliant customer acquisition hack. Ever noticed these offers are limited to specific credit cards? Like Amazon’s recent sale that supported only ICICI Bank. That’s because the bank sees it as a way to bring in new users and increase card usage — a long-term win for them. Second, it subtly increases consumer spending. Would you buy an iPhone for ₹70,000 in one go? Probably not. But paying ₹6,000/month? Suddenly feels doable. That psychological play is intentional. And while Amazon or Flipkart may cover the interest cost to make it “no-cost” for you, they’re still winning because you're buying more — driving up their revenue. Third, it's a repackaged discount — not a real freebie. You often have two choices during sales: ₹3,000 off if you pay upfront Or, pay the full price via a no-cost EMI. You can’t have both. The discount you “lost” upfront is simply being used to cover the EMI interest behind the scenes. And finally, there's always a small catch — processing fees. Even if EMI feels “no cost,” there’s usually a fee that is quietly added in. It’s not massive, but it’s not zero either. 💡So what’s the actionable insight here? Before you click “Buy Now, Pay Later,” do the math. ✔️ Compare upfront discounts vs EMI offers ✔️ Check if the product is available cheaper on other platforms ✔️ Watch for hidden fees or T&Cs ✔️ If you’re buying through EMI, make sure it’s a need, not a temptation Financial literacy is the real flex in a world built on EMIs. To get deeper insights on business, money psychology, and growth strategies — subscribe to our newsletter via the link in the comment.
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