Up to 80% off, but at what cost? The catch behind festive deals

“Up to 80% off.” “Crazy deals.” “Mega sale.” Festive shopping season is here, and online platforms are pulling out all the stops to get you to spend. That phone you bookmarked weeks ago suddenly looks affordable. The television you wanted for your home is on sale. And at checkout, there is one more temptation: easy EMIs.But a discount is only part of the deal. The way you pay can affect how much you eventually spend, especially when interest, processing fees and taxes enter the picture.So, should you convert your purchase into credit card EMIs or opt for Buy Now, Pay Later (BNPL)? Both let you buy now and pay later, but neither is automatically the cheaper option.The real question is not how small the monthly instalment looks, but how much you will pay by the end. Here is what to check before choosing a festive payment deal. CREDIT CARD EMI VS BNPL: WHAT IS THE DIFFERENCE?A credit card EMI allows you to split an eligible purchase into monthly instalments using your existing credit card limit. Depending on the offer, you may have to pay interest, or you may qualify for a no-cost EMI deal or an additional instant discount.BNPL, meanwhile, lets you buy a product now and pay later. Depending on the facility, you may be able to repay the amount in one payment or through instalments. These facilities may be offered through banks, non-banking financial companies (NBFCs) or other lending arrangements, with terms varying by provider. Both options can help spread the cost of a purchase. However, their charges, repayment schedules and eligibility conditions can differ.Adhil Shetty, CEO of BankBazaar, said shoppers should look beyond the convenience of paying in instalments and examine the overall cost of borrowing.“A credit card EMI is a convenient way to use an existing card limit for a structured repayment, requiring no extra paperwork or credit check,” he said.Shetty said BNPL schemes and other checkout loans, on the other hand, are short-term digital credit facilities offered through lenders such as NBFCs and banks.His advice is to compare the total amount payable, including interest, fees, taxes and discounts, rather than choosing an option simply because the monthly instalment looks small.THE CHEAPEST EMI MAY NOT BE THE BEST DEALImagine finding your favourite gadget at a festive discount. At checkout, a credit card EMI makes the monthly payment look manageable, while a BNPL option promises the flexibility to pay later.Which one should you choose?Start by comparing the total amount payable under each option. A lower monthly instalment does not automatically mean a lower overall cost. It could simply mean that the repayment period is longer.Ashish Lath, founder and CEO of SaveSage, said there is no single payment option that is always the cheapest. The better deal depends on the final amount paid after accounting for discounts, interest and additional charges.Consider a product priced at Rs 50,000 that comes with an instant credit card discount of Rs 3,000. The price falls to Rs 47,000. However, if the EMI option involves Rs 2,000 in interest, processing fees and applicable taxes, the effective saving falls to Rs 1,000 compared with the original price.This is why shoppers should compare the final cost across available payment options. A headline discount may look impressive, but financing charges can eat into the savings.Before choosing a payment plan, check the interest rate, processing fee, applicable GST, convenience charges and any foreclosure fees. Where applicable, review the Annual Percentage Rate (APR) as well, since it helps indicate the overall cost of borrowing.NO-COST EMI: IS THERE REALLY NO COST?“Pay in easy instalments” and “no-cost EMI” are among the most tempting messages shoppers see during festive sales. But the phrase does not always mean that the purchase comes without additional costs.In some no-cost EMI offers, the interest cost is offset through a discount provided by the merchant or manufacturer. This can mean that shoppers receive a smaller upfront discount than they might have received by paying in full.Processing fees and GST on applicable charges can further reduce the benefit.Shetty advised consumers to compare the total EMI outgo with the price they would pay upfront. They should also check whether choosing EMI affects their eligibility for cashback, reward points or other promotional benefits.For example, a 2% processing fee on a Rs 20,000 purchase adds Rs 400, plus applicable GST. The actual fee depends on the lender or card issuer and the terms of the offer.Before accepting a no-cost EMI, check the total repayment amount, any upfront fees and whether you are giving up another discount. What matters is the saving left after accounting for all these costs.BNPL MAY OFFER CONVENIENCE, BUT READ THE FINE PRINTBNPL can be useful for shoppers who want to spread a smaller purchase over a short repayment period. But the convenience of a quick checkout should not distract them from the repayment terms.Before accepting a BNPL offer, check whether it is interest-free, when the payment is due, and whether late payment penalties or other charges apply.Some checkout credit facilities may offer longer repayment periods. However, a longer tenure can increase the total interest paid, even when the monthly instalment appears affordable.Lath said shoppers should ensure that repayments fit comfortably within their budget. Missing payments can attract additional charges and may negatively affect their credit score.The decision to borrow, he added, should depend on affordability and actual savings, not simply the convenience of paying later.MULTIPLE SMALL EMIS: THE FESTIVE DEBT TRAPFestive shopping rarely stops at one purchase. There may be a smartphone for personal use, a television for the living room, a kitchen appliance and gifts for family members.Each purchase may come with a small monthly instalment. Individually, these payments may not look like much. Together, they can put considerable pressure on the household budget.Shetty cautioned that accumulating multiple small EMIs across purchases can strain finances, even when each commitment seems manageable on its own.Before opting for another EMI or checkout loan, shoppers should add up their existing repayments, household expenses and other financial commitments. They should also leave enough room for savings and unexpected expenses.Applying for several credit cards or checkout loans in quick succession just to access festive offers is another habit to avoid. Multiple credit applications and excessive borrowing can affect credit health, while missed repayments can make future borrowing more difficult.Paying on time and keeping credit utilisation under control can help consumers maintain a healthier credit profile.HOW TO CHOOSE THE RIGHT FESTIVE PAYMENT DEALBefore choosing between a credit card EMI and BNPL, keep these five points in mind:Compare the final bill: Add interest, processing fees, applicable GST and other charges. Count discounts and cashback only if you meet the offer's conditions.Check the upfront price: Find out whether paying in full gets you a better deal than choosing an EMI.Read the repayment terms: Check due dates, late payment penalties and any foreclosure charges before accepting the facility.Protect your monthly budget: Ensure the instalment fits comfortably alongside existing EMIs, household expenses and savings.Ask yourself if you need the product: A discount is not a saving if it encourages you to buy something you would not otherwise have purchased.SO, WHICH FESTIVE PAYMENT OPTION SHOULD YOU CHOOSE?There is no universal winner. A credit card EMI may work out cheaper when it comes with a genuine discount and low charges. BNPL may be convenient when the repayment terms are clear and the overall cost is lower. Paying upfront may be the simplest option if you can afford it without dipping into emergency savings or compromising essential expenses.So, the next time your shopping app flashes “Crazy Deals” or “Up to 80% Off”, pause before checking out. Look beyond the sale banner, calculate the real cost and choose the payment option that suits your budget.Because the best festive deal is not the one that makes you spend more today. It is the one that leaves you with genuine savings after the sale is over.- Ends