Credit cards: How to use them smartly without going overboard? 8 key tips

The festive season is a time for celebration, joy, and togetherness. It's a time to shower loved ones with gifts, decorate your home, and indulge in delicious food. However, it's also a time when it's easy to overspend. Therefore, before you go trigger happy with your credit card spends, remember to do it prudently. The smart way to spend during the festive season is to create a budget as per the affordability.

Here are some tips to follow while using your credit card this festive season:

• Maximise Reward Points and Cashback: Many credit cards offer reward programs that earn points or cashback on your spending. Look for cards with programs aligned with your festive spending habits. For example, if you plan on buying a lot of gifts online, a card with cashback on online purchases could be a good fit.

• Maximise Festive Offers: During the festive season, banks roll out exciting offers – from discounts on electronics to cashback on fashion purchases. The key to leveraging these promotions is aligning them with your pre-planned purchases.
• Use Virtual Credit Cards for Online Security: For online shopping, consider using virtual credit cards. These temporary card numbers provide an extra layer of security, reducing the risk of your personal information being compromised.
• Use Your Credit Limit Responsibly: Don't get carried away by the festive cheer and exceed your credit limit. Keep your spending within your limit to avoid additional charges.
• Pay Your Bills on Time: Avoid interest charges by paying your credit card bills in full and on time. This is a crucial aspect of responsible credit card usage
• Compare and Choose Wisely: Before applying for a credit card, compare different offers from various banks. Consider factors like annual fees, interest rates, reward programs, and additional benefits. Choose a card that aligns with your spending habits and financial goals.
• Set Spending Limits: To avoid impulsive purchases, set spending limits for each category of festive expenses. This helps you stay within your budget and avoid accruing unnecessary debt.
• Monitor Your Spending Regularly: Keep track of your credit card transactions to ensure you're staying within your budget. Regularly review your statements and identify any unauthorised charges.

Most importantly, remember that the true spirit of the festive season lies in the joy of spending time with loved ones, not in the amount of money you spend. By celebrating mindfully and responsibly, you can create lasting memories without compromising your financial well-being.

Sanjeev Moghe - President & Head - Cards and Payments, Axis Bank