Top tips to use credit cards wisely for festival shopping
Credit cards serve as valuable financial instruments, enabling seamless transactions and the option to convert significant expenditures into manageable EMIS. Festive seasons, as well as other occasions, witness a plethora of enticing discounts and special offers extended by offline and online retailers to attract customers.
Aurudu Festive season is an exciting time in Sri Lanka that brings celebrations and a surge in shopping activities. While purchasing your favourite items to add more joy to your festival, it’s also an occasion when many of us turn to credit cards to fund our purchases. Using credit cards wisely during festive shopping can help you enjoy the season without getting into bad debt. Here are some tips to keep in mind before embarking on the festive shopping spree with credit cards.
SET A BUDGET
Who does not like buying things we like but setting a budget will ensure you can repay t he borrowed money timely and without default. Before you begin your festive shopping, establish a realistic budget. Determine how much you can comfortably spend without straining your finances. Make a list of all the items you plan to purchase, including gifts, decorations, and electronic items. Allocating specific amounts for each category will help you stay on track and avoid impulsive spending. Your budget should consider your monthly income, existing debts, and other financial obligations.
CHOOSE THE RIGHT CREDIT CARD
Look for cards that offer rewards, cashback, or discounts at popular retailers or online marketplaces. Some credit cards are specifically designed for festive seasons and provide attractive benefits like higher cashback rates or zero-interest EMI options. Additionally, consider cards with no annual fees or low-interest rates to keep your overall expenses in check.
CHECK YOUR CREDIT LIMIT
Before swiping your credit card, ensure you have a clear understanding of your credit limit. Overshooting your limit can lead to hefty penalty charges and negatively impact your credit score. If necessary, request a temporary limit increase from your card issuer, but use this option judiciously and only if you are confident about managing the additional credit responsibly.
PLAN FOR REPAYMENT
Plan for repayment before you make purchases. Ideally, you should aim to pay off your credit card balance in full by the due date to avoid interest charges. If that’s not possible, create a repayment strategy that includes paying more than the minimum amount due to reduce the interest burden. Factor in your budget and financial goals to determine the most suitable repayment plan.
COMPARE REWARDS AND OFFERS
Before making your purchases, check the rewards and offers associated with your credit card. Many cards offer cashback or discounts at specific merchants during the festive season. Take advantage of these promotions to maximise your savings. Some credit cards also provide additional warranty coverage, purchase protection, or travel benefits that can be valuable depending on your shopping plans.
KEEP TRACK OF TRANSACTIONS
Festive shopping often involves multiple transactions, both online and offline. To stay in control of your spending, monitor your credit card transactions regularly. Most card issuers provide online access to your statements, making it easy to track your expenses. This realtime awareness will help you spot fraudulent transactions and ensure that you stay within your budget.
AVOID IMPULSIVE BUYING
Festive sales and discounts can be tempting, leading to impulsive purchases. It’s crucial to differentiate between wants and needs. Take your time to evaluate each purchase and consider its long-term value. A wellthought-out shopping list will help you make mindful choices.
Festive shopping can be a rewarding experience when approached with careful planning and spending. Setting a budget, choosing the right credit card, and understanding your credit limit are recommended steps. Additionally, taking advantage of rewards and offers while keeping a close eye on transactions will ensure a financially stress-free festive season. By being mindful of your purchases and staying within your budget, will make festivities truly joyous.