Top 5 Benefits of using credit cards during festive season

29 DECEMBER, 2021

The last leg of the year is an exciting time for festive shopping. Be it buying a car, expensive gadgets, home appliances, or other big-ticket purchases, we all tend to schedule such shopping during the year’s end. The e-commerce giants and retail merchant stores offer huge and attractive discounts for a shopper's delight during this time of the year.

Most people tend to avail of personal loans during such times to fund their expensive shopping but doing that comes with a high-interest rate implication which may burden some of us over time. However, one of the best ways to escape from the personal loan interest rate burden is to fund your heavy expense purchases with a credit card. This way, you can enjoy an interest-free credit period over time and save considerable money during the festive season. Usually, those with higher income want a higher credit limit, so funding expensive shopping during the festive season shouldn’t be an issue with the credit card.

Let’s look at some of the benefits to swipe your credit card during the festive season and save big:

1. Save big on deals, rewards, and cashback

Come festive season, and you’d find an array of deals, rewards, and additional discounts on credit cards at most merchant stores, both offline and online. Using your credit card for festive shopping lets, you have an easy and seamless purchase process and get rewarded attractively. You can accumulate the reward points on every purchase and redeem them to do more shopping and avail exciting deals. Also, you can save big on the fantastic discounts on credit cards during the festivals and realize your dream of bringing home your favourite stuff.

2. Credit Card Shopping Boosts Your Credit Score

If you’re using your card within your credit limit during the festive season and are regular with repayments on time and in full, your credit score improves considerably. We all know how important your credit score is when it comes to availing of loans and credit cards in the future. Always make sure that you don’t overstep your credit utilization ratio. Be diligent with your credit card repayments during the interest-free period to save huge during the festive season.

3. Spread Purchase Cost Over Time with EMIs

Most e-commerce online stores and offline retail stores look forward to the festive season to come up with great shopping offers for their customers. You’d find many banks offering EMI options on their credit cards at zero cost, no processing fees, and zero interest. This helps an average buyer reduce the purchase burden significantly by converting the entire amount in EMIs. This helps scatter the cost over a few months or years without any additional cost or interest on the credit card. This comes across as a beneficial feature that prompts most buyers to shop during the festive season and avoid paying all the money in one go.

4. Zero Interest Period

One of the best parts about using credit cards is that you can make transactions without worrying about paying additional costs over your purchase towards interest. There is a limited period called ‘no interest period,’ and every credit cardholder is made aware of the same while applying for card. This period is a boon for regular shoppers who prefer to purchase everything on the credit card and pay in full before the due date to enjoy an interest-free period. The basic rule to avail of this benefit is to clear your credit card bills in time and in full to avoid paying the interest.

This zero or no interest period usually lasts from 18 to 55 days. So if you’re planning to buy an expensive gadget, home appliance, planning to travel on your credit card with inadequate funds at hand, you can go ahead with the same and make it a point to clear the dues within that period to ward off interest payment.

Tips for Smart Shopping on Credit Card This Festive Season

1. Set aside a festive shopping budget in the first place. It’s easier to get lured and overstep the budget by the exciting deals and offers together with the convenience of the credit card. This makes the repayment difficult and prompts you to delay or miss a repayment altogether. Decide a number you can conveniently repay and stick to it.

2. Avoid withdrawing cash against your credit card for shopping. While most credit cards offer you an interest-free period for all transactions, there’s no such rule for cash withdrawals. The interest on cash withdrawals on your credit card starts getting accrued right from day one.

3. If you have a sparse credit limit and believe it will exhaust during the festive season, request a credit limit increase well ahead of time. Your credit card company will evaluate your current income against the credit limit enhancement request and proceed accordingly.

4. Credit card interest rates are pretty high. Make sure that while opting for no-cost EMIs, you pick a shorter repayment period to cut down on the interest burden.

5. Always pick the credit card smartly. Choose the one that offers deals and offers on the domains matching your interest. If you’re fond of shopping or traveling, pick a card that offers discounts on the same to help you save more.

With the above benefits and tips, you are sure to have a great experience of shopping on your credit card during the festive season. Exercise some restraint and follow the above tips to make the most out of it.