Festive sales offer attractive deals, but the choice of payment method significantly affects the final purchase cost. According to reports from NDTV Profit, consumers have multiple options including UPI/debit cards, credit cards, and no-cost EMI, each with different financial implications. Cash payments keep things straightforward with no instalments, but may miss out on discounts tied to select bank cards. Credit cards can be economical when the full bill is cleared before the due date, with banks offering instant discounts of around 10% and reward points on eligible purchases.
Credit cards offer cash-flow advantages during festive sales when full payment is made before the due date. As reported by NDTV Profit, banks often partner with online marketplaces for limited-period promotions, providing instant discounts and reward points on eligible purchases. For example, a ₹50,000 transaction with a 5% discount would reduce the amount payable to ₹47,500. However, outstanding balances can attract annual interest of 36% to 42%, potentially erasing savings from festive offers if only partial payments are made.
No-cost EMI purchases can result in higher effective costs due to overlooked charges and fees. According to NDTV Profit reports, banks may levy non-refundable processing fees between ₹199 and ₹299, while 18% GST on the interest component adds to the overall cost. For instance, a ₹50,000 purchase through no-cost EMI could result in an effective outlay of more than ₹50,600 after fees and GST. Upfront purchases with instant discounts could bring the price down to ₹47,500, making full payment potentially cheaper for consumers with adequate funds available.
For consumers with adequate funds available, paying the full amount through a credit card may work out cheaper provided the bill is cleared in full by the due date. As reported by NDTV Profit, EMI financing may make more sense for essential, high-value purchases where avoiding a large immediate cash outflow is the priority. The final cost of no-cost EMI purchases can be higher than it initially appears due to charges that are easy to overlook, making upfront payments with discounts potentially more economical for most festive purchases. Spreading Christmas purchases over September, October and November can help households avoid making all purchases during the festive rush, particularly for durable and non-perishable goods where there is little risk of spoilage.
