Easy instalments, big offers, tempting ads. A few smart habits can protect your wallet this festive season.
By Capital Chanakya
The signs are everywhere: “Buy now, pay in 9/12 easy instalments.” “No-Cost EMI on cards.” As the
festive season begins, online platforms and shops are competing for your attention, and the EMI offer is
their favourite tool. It makes a ₹60,000 phone feel like a ₹6,700 purchase, and a smaller number on the screen makes it easier to click “buy”. Many shoppers end up taking home a gadget they had not planned to buy, or a more expensive one than they had in mind. The monthly figure looks light, but it hides what you will pay in total. And in finance, very little is free.
Follow the interest
When you buy on EMI, a bank lends you the money and charges interest. In a “No-Cost” offer, that interest does not vanish. The seller usually absorbs it by cutting the product price or giving a discount that cancels it out on paper. The seller then recovers this cost elsewhere, often by not offering you the best price in the first place.
Some costs still land on you. Even when the interest is “waived”, you can be charged 18% GST on the interest amount. Many lenders also add a one-time processing fee of a few hundred rupees. And the biggest cost is often the discount you lose, because festive offers like instant cashback usually apply only when you pay in full.
A ₹60,000 phone, made simple
Imagine a phone priced at ₹60,000, with a ₹3,000 instant discount if you pay in full. Paying upfront, youspend ₹57,000.
Now say you choose the 9-month “No-Cost” EMI. You lose the ₹3,000 discount, so you start at ₹60,000.
Add roughly ₹700 as GST on the hidden interest and about ₹235 as a processing fee. You end up paying
around ₹60,900, spread over nine months.
That is nearly ₹3,900 more than paying upfront, for a phone that was advertised as “no cost”. The exact figures vary by lender, but the pattern is the same: the offer feels free, while the real price is higher.
There is a quieter cost too. An EMI uses up your credit limit, appears on your credit report and ties up part of your salary for months. Miss a payment, and penalties can be steep.
None of this means EMI is always a bad idea. If you genuinely need the item, cannot pay at once, and
the numbers still work after fees and lost discounts, it can be sensible. The mistake is believing “No- Cost” means no cost.
Make a plan before the offers find you
The best defence against clever advertising is a decision made before you see it. Start by fixing a ceiling
for the whole festive season, covering shopping, gifts, sweets, travel and decorations. Base it on money
you already have or a small slice of this month’s income, not on what the offers make look affordable.
Next, divide your spending into needs, wants and gifts, each with its own limit. A fridge that has stopped
working is a need. A newer phone when yours works fine is a want. Needs come first, and wants get only what is left over.
Before spending anything, keep aside at least one month of essential expenses such as rent, groceries,school fees and bills. A medical bill or a job disruption in November should not force you to borrow at
high rates.
Give yourself 48 hours
For any unplanned purchase above a limit you choose, say ₹5,000, wait two days. Put the item in your cart and walk away. Countdown timers and “only 2 left” banners are designed to rush you. If you still want it after 48 hours and it fits your budget, go ahead. Many impulse buys lose their charm in that time.
If you are considering EMI, ask for the total amount you will pay at the end, whether there is a processing fee or GST on interest, and what discount you lose by not paying upfront. Compare the final numbers, not the monthly instalment.
The real festive gift
Festivals are about family, food and lights. They are not a test of how much you can spend. Retailers know that small monthly payments feel painless, and that is why they push them so hard. The debt behind them, though, lasts well beyond the festive glow.
This Diwali, set your limit first, pause before you buy, and read the fine print. Your future self, and your January bank balance, will thank you.
Instagram account – save2gain
https://www.instagram.com/save2gain/
