1 week ago
Credit Card EMIs May Ease Payments, Not Lower Costs
An EMI lets someone split a large payment into smaller monthly payments.
This can make it easier to manage money each month.
However, smaller payments do not always mean the purchase is cheaper.
Interest and processing fees may increase the final amount paid.
A longer repayment period can also make the total cost higher.
Paying the full amount at once may be better when someone can afford it.
No-cost EMIs can sometimes be useful, but shoppers should check the terms carefully.
EMIs connected with UPI may eventually be used for everyday needs such as groceries and medicines.
People should use them only when the repayments fit comfortably within their budget.
EMIs can reduce monthly payments but may increase the total repayment amount.
Interest, processing fees, tenure and lost rewards can affect EMI value.
Experts say paying in full may be more rewarding when affordable.
Longer repayment periods lower monthly instalments but can raise overall costs.
EMIs linked with UPI could cover groceries, medicines and other essentials.
- Who
- Credit card users and consumers, with guidance from Ashish Lath of SaveSage and Siddharth Mehta of Kiwi.
- What
- The article explains that converting purchases into credit card EMIs improves payment flexibility but does not always reduce total costs.
- Where
- When
- No specific date is provided.
- Why
- EMIs can help consumers manage temporary cash-flow mismatches, but users must compare the total repayment cost with paying upfront.
Pay In Full When Affordable
Use EMIs For Flexibility
Overall cost
Pay In Full When Affordable
Paying in full can avoid interest and processing costs and may preserve rewards.
Use EMIs For Flexibility
An EMI may be worthwhile when the convenience of spreading payments justifies additional costs.
Cash-flow management
Pay In Full When Affordable
Consumers who can comfortably afford a purchase may not need to take on monthly repayment obligations.
Use EMIs For Flexibility
EMIs can help people manage a temporary mismatch between available cash and essential or discretionary expenses.
Everyday spending
Pay In Full When Affordable
Using EMIs for routine purchases could make it easier to accumulate repayment obligations, so transparency is important.
Use EMIs For Flexibility
EMI availability through UPI could broaden access to manageable repayments for groceries, medicines and other essential purchases.
Key facts
- Main benefit
- EMIs spread a large expense over time and can improve cash-flow management.
- Potential added costs
- Interest, processing fees and longer tenures can increase the total amount repaid.
- Full-payment comparison
- Consumers are advised to compare EMI repayment with paying the purchase amount upfront.
- No-cost EMI
- A no-cost EMI may be useful, but its terms and any lost rewards should still be reviewed.
- Emerging use
- EMI options integrated with UPI could apply to groceries, medicines and other essential expenses.
- Affordability guidance
- Repayments should remain comfortably within the consumer’s means.
Quotes
Siddharth Mehta
Co-founder and COO of Kiwi
“For consumers facing a temporary cash-flow mismatch, the ability to structure even an essential purchase into manageable repayments can be useful. As this category grows, transparency remains critical. Consumers should clearly understand the total repayment obligation and use EMI where the convenience and flexibility justify the additional cost, while ensuring the repayment remains comfortably within their means.”
livemint.com
“Converting a large purchase into EMI is not necessarily cheaper. Consumers should always look beyond the monthly instalment and understand the full cost — including interest, processing fees, tenure and the total amount repayable. The real value of EMI is often not that it reduces cost, but that it gives consumers greater flexibility to manage cash flows and spread a large expense over time.”
livemint.com
Sources
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