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Ansh Kadam
Founder & CEO at Bui...ย โขย 7m
Is your bank doing charity by offering you a No-Cost EMI? Absolutely not. RBI itself has made it clear โ 0% interest does not exist. Yet banks, brands, and e-commerce platforms continue to aggressively market no-cost EMI offers like theyโre doing you a favor. So how do they actually make money? Letโs break it down. First, No-Cost EMI is a brilliant customer acquisition hack. Ever noticed these offers are limited to specific credit cards? Like Amazonโs recent sale that supported only ICICI Bank. Thatโs because the bank sees it as a way to bring in new users and increase card usage โ a long-term win for them. Second, it subtly increases consumer spending. Would you buy an iPhone for โน70,000 in one go? Probably not. But paying โน6,000/month? Suddenly feels doable. That psychological play is intentional. And while Amazon or Flipkart may cover the interest cost to make it โno-costโ for you, theyโre still winning because you're buying more โ driving up their revenue. Third, it's a repackaged discount โ not a real freebie. You often have two choices during sales: โน3,000 off if you pay upfront Or, pay the full price via a no-cost EMI. You canโt have both. The discount you โlostโ upfront is simply being used to cover the EMI interest behind the scenes. And finally, there's always a small catch โ processing fees. Even if EMI feels โno cost,โ thereโs usually a fee that is quietly added in. Itโs not massive, but itโs not zero either. ๐กSo whatโs the actionable insight here? Before you click โBuy Now, Pay Later,โ do the math. โ๏ธ Compare upfront discounts vs EMI offers โ๏ธ Check if the product is available cheaper on other platforms โ๏ธ Watch for hidden fees or T&Cs โ๏ธ If youโre buying through EMI, make sure itโs 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 โ subscribe to our newsletter via the link in the comment.
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