How does a no-cost EMI work on a credit card?

A no-cost EMI on a credit card allows you to pay for a purchase in monthly installments without being charged additional interest. According to RBI guidelines, interest is still applicable, but it is typically offset in one of two ways:

• Upfront Discount: The merchant provides a discount equal to the total interest amount, making the final payment equal to the product's original price.
• Price Bundling: The interest cost is already included in the product's displayed price.

Users should note that bank processing fees and GST on interest may still apply.