With the festive season underway in India, there is an air of festivity, family gatherings, and plenty of shopping.
Credit cards now play an important role in this period because of the tempting discounts they offer, including cashback, discounts, and equated monthly instalments (EMIs) on both online and offline shopping. But amidst this festive fun, it’s important to use your credit card judiciously and avoid costly mistakes that could lead to overspending and out-of-budget expenses, eventually leading to a debt burden.
So, here are five mistakes you should try to avoid this festive season.
Not Using Your Credit Card Rewards Properly
Credit cards provide excellent benefits and rebates, particularly during the festive season. However, many people fail to take the full benefit of these rewards. For instance, if your card offers additional cashback on electronics or food, utilise it while making those purchases. However, avoid buying unnecessary items solely to spend points or collect them. Make wise choices and maximise your benefits while avoiding debt.
Buying Things You Don’t Need
The numerous deals and offers over the festive season could tempt you into buying more. Before you start using your credit card, take a moment to consider whether that fancy gadget or pair of shoes is truly necessary. Sticking to a budget and concentrating on what you genuinely need might help you avoid overpaying. Making a shopping list in advance could help you stay on target and avoid buying unnecessary items during the festive time.
Chasing Discounts Instead of Buying What You Need
Festive sales can make everything look like a great deal, but buying something just because it’s on discount can end up being a waste of money. Before you jump on to the next sale, ask yourself if you really need that product. Sometimes, what seems like a bargain often ends up being an unnecessary expense. Focus on buying what you need, and not just what’s being offered at a lower price.
Missing Payment Deadlines
The festive time means a lot of hustle and bustle, and with so much going on, it’s easy to forget to pay your credit card bills on time. But missing your payment deadlines can lead to late fees and hurt your credit score. To avoid this, set reminders on your phone or automate your payments through your bank’s app. Staying on top of your due dates is crucial to maintaining a healthy credit score.
Paying Only the Minimum Due
A common mistake people make during the festive season is paying only the minimum amount on their credit card bills to manage cash flow better. While this might feel like a good short-term solution, it can lead to high interest charges in the long run. Paying just the minimum will keep you in a debt cycle longer and increase the overall cost of what you have bought. It’s always better to pay off your full balance whenever possible to avoid paying interest on your purchase.
