Credit card EMIs are one the most popular tools for affordable shopping experience in India. They offer easy approvals, instant access and flexibility. Their feature allows users to convert large credit card purchases into smaller monthly payments instead of paying the full amount at once.
This helps make expensive items more affordable by spreading the cost over time. Many banks and fintech platforms now offer zero or low-cost EMI schemes on shopping, electronics, etc.
However, while credit card EMIs may seem affordable, sometimes they can come with many hidden costs. These can include processing fees, interest charges, etc. Most importantly, frequently using credit card EMIs may end up making the user spend way more than they originally intended to, increasing the total repayment burden.
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Credit Card Usage In India
It has become quite easy to access credit cards as top lenders continue to offer faster approvals, digital onboarding and pre-approved limits to customers.
Last year, India recorded two consecutive months in which credit card spending crossed Rs 2 trillion. These were September and October 2025, after which the spending moderated to Rs 1.89 trillion in November, data by the Reserve Bank of India showed.
The trend showcases a steady rise in credit card usage in India and growing consumer spending. However, it also flags concerns about debt trap and the risk of overspending if repayments are not managed carefully.
Hidden Costs In Credit Card EMIs
1. When a purchase is converted into EMIs, banks usually charge an interest rate on the outstanding balance. This rate increases the total repayment amount over time.
2. Even in the case of no cost EMIs, customers don’t realise that sometimes that the interest may already be added to the product price.
3. Additionally, when a transaction is converted into EMIs, banks often charge a one-time processing fee. This fee usually has a minimum and maximum limit. It can also add to the overall cost of the EMI purchase.
4. If you choose to close your EMI before the end of the tenure, banks may charge a foreclosure fee. This is usually a percentage of the remaining principal amount and increases the total cost of early repayment.
5. As per current tax rules, Goods and Services Tax (GST) is applied to credit card EMI charges, including interest, processing fees and foreclosure fees. This increases the overall cost of borrowing.
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Due to these reasons, while EMIs may look attractive, they can be more expensive than the advertised rates. To avoid hidden costs, it is recommended to compare product prices across different websites and stores before buying. Always check offers carefully and read the terms and conditions before choosing no-cost EMI schemes.