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India is a spiritual country at heart, and thus, celebrates many festivals over the whole year. Some of these festivals can only be seen in a specific state, while others are celebrated all over the country.
In brief, here are some of the most well-known festivals: Holi, Durga Puja, Eid, Ganesh Chathurthi, Navratri, Ramzan, and Dussehra, Diwali, Christmas, Janmashtami, Onam, and others. However, in the festive spirit, we tend to spend more during such times. As a result, credit card use shoots up very often. This blog tells you how to manage your credit cards during the festival season.
The fact of the matter is that we can hardly keep track of how much we spend during these festivities. There is something different to buy for each festival as well. For instance, during Diwali, we buy firecrackers, sweets, new clothes, gifts, and much more.
Unless one is careful, one can end up spending a great deal of their monthly savings. The problem becomes more significant when we start using our credit cards for all of these purchases. If you let this go unchecked, you could even find yourself deep in debt, which is not something you want either before or after the good times. Thus, it is essential that you manage your credit cards well during the festival season.
Nowadays, banks are ready to give away credit cards for free, without any yearly charge! Now, even if the annual charge clause is valid, it is still a credit card. You will be charged interest for all purchases unless you pay within a stipulated period.
The more money you spend with a credit card, the more you are borrowing from the bank. In such cases, the bank is going to charge interest that is heftier, or for a more extended period. In short, credit cards encourage indiscriminate and unnecessary spending. Credit cards are advertised as free money, but it is anything but that.
Due to this very nature credit card usage, people tend to spend without second thoughts, especially during the festive seasons. The result is enormous bills and subsequent credit card debt. To keep this predicament at bay, it is vital that you manage your credit cards well during the festival season.
Here are a few tips on how to plan your finances during the festive season. Some of the tips will also tell you how you can avoid using any cards in the first place!
Set a budget: Having a budget is one of the most effective ways to avoid overspending and to plan your finances during the festive season. When you know the limits of your expenditure, you are less likely to splurge needlessly. With a budget, even when purchasing with a credit card, you are less likely to overspend.
For instance, during any festive season, if you have a budget of Rs. 20000-40000, you can consciously make sure that you don’t spend beyond that. Now you know why you need to set a budget for festivals season.
Make a purchase list: Sometimes, when our shopping trips are unplanned, we tend to buy similar yet unnecessary items. At other times, we tend to buy anything that we think is needed but is not so. This is because the trip is unplanned.
If, however, you make a purchase list, you know exactly which items to buy. Thus, there is much less chance to buy anything unnecessary.
Utilize credit card offers: One smart way to avoid ending up with credit card debt is to use credit card offers. Today, banks offer credit cards to benefit specific lifestyles such as shopping, traveling, dining, entertainment, health, wellness, online shopping, and more.
You get benefits like reward points, cashback, free tickets, discounts, 1+1 deals, gift cards, and vouchers. Use these! For instance, if you want to buy furniture during the festive season, get an HDFC credit card that offers a discount of up to Rs. 5000 off all Pepperfry purchases.
Redeem reward points: When you make purchases with a credit card, you get reward points. You may also get reward points in the form of a credit card welcome gift, and when you reach certain milestones. When you have enough RPs, you can redeem them to purchase items without using any money! This will certainly come in handy during the festive season.
DIY Gifts: The best gifts are not the most expensive ones, but ones behind which the most thought and care has gone. If you can craft something beautiful and useful as a gift, then you not only save money, but are also giving away something thoughtful.
Festive times are such that there are many things to spend on. Credit cards only accentuate spending, which may not be great for you in the long run. You may fall in credit card debt due to overspending, or even risk bankruptcy.
The more prudent way is to manage your finances and festive spending budget. Also check your credit score regularly to make sure you are clear of any trouble.
Keep this in mind when the colours are up for the next round of festivities. Don’t forget to enjoy!