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Four tips to use credit cards effectively during festival season

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Festivals are not only meant for celebration but also for shopping experiences.

Four tips to use credit cards effectively during festival season
Festivals are not only meant for celebration and thus shopping experiences. It is this time when brands offer huge discounts on products, making it one of the best times for shoppers to make purchases.
Vendors even offer great deals on credit cards, hence making it the obvious mode of purchase. However, before moving ahead, one must keep in mind a couple of things for ensuring sound financial health instead of landing into a debt trap.
Here are some of the tips to use credit cards effectively during festival season:
Don’t overuse credit cards
When using credit cards, Anuj Kacker, Co-founder, MoneyTap suggests customers to not exceed 30-40 percent of the credit limit, which could otherwise directly impact the credit score and act as a barrier to future credit card loans.
“Overspending just because it's available is not the right choice,” says Bhavin Parekh, Sr. Vice President - Sales and Operations, SPOCTO.
Compare offers before using
As credit cards come up with new offers during festivals, Kacker advises customers to keep an eye on them before going for shopping.
"It's better to check the bank-wise discounts available for all online and offline sellers, " opines Parekh.
Use low-interest EMI options to split cost burden
If the investment is in a big-ticket item, Anil Pinapala, CEO and founder, Vivifi India finance advises cardholders to evaluate EMI options properly to arrive at the actual cost of the product and only indulge if they are within a “deal” range after the interest costs.
Clear credit dues before shopping
Last but not least, Kacker suggests users to clear all the credit dues before shopping.
“This will help in maintaining a good credit score and give the ultimate freedom to spend during the festivities,” says Kacker.
According to Pinapala, users must be sure that they are able to repay their dues in a timely manner and not go overboard during this “sale” period as the savings in product will be lost with interest and fees on the credit card if not paid in a timely manner.
“Irregular payments or missed payments on cards can cause the credit score to derail quickly and this will cause unavailability of credit to fulfil other needs as and when they come up,” adds Pinapala.
Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
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