tips for holiday purchases with credit cards – EzAnime.net

Credit card interest rates are high.

Festive offerings surround us. With great deals, there are also easy financing schemes that help facilitate high-priced purchases. So you have options not only for the things you want to buy, but you also have financing options like credit cards, personal loans, buy now and pay later loans, etc. Let’s take a look at what to keep in mind when wasting money with your credit card.

Always budget
Set a holiday shopping budget. When shopping with your credit card, it is important that your fees are easily paid. So find a number that you are comfortable with and keep your expenses within it. When the holiday season is over, your personal finances will improve.

Choose a card wisely
Each credit card has its own benefits, rewards, and incentives. If you have decided on your purchase items, it is worth knowing which credit card would best incentivize the purchase. Many high-priced electronics, like flagship smartphones, have links to credit cards that offer attractive discounts and rebates. It will help you use a card that offers the best rewards for your high-value purchase. If you don’t have that card, consider getting it.

Spending limit can be increased
If your spending limit is small and likely to run out during holiday purchases, contact your card provider. If you have previously exceeded your limit and have a good payment history, your card provider should improve your limit. If this has not happened automatically, you should talk to the provider and do it.

Short-term EMIs are the best
Credit card interest rates are high. The longer you have fees on your card, the more interest you will pay. Interest is compounded every month as well, so it’s easy to incur an annualized interest charge of 40-50%. While no-cost, no-interest EMI options may be available, pay your card fees in the shortest time possible to minimize borrowing costs.

Be careful with the use of cash
Most credit cards will allow you to withdraw cash from ATMs. But there is no interest-free period for cash withdrawals on your credit card. Interest will begin to apply from the first day of your withdrawal. Therefore, be very careful with this option. You may want to shop online, where your transactions are incentivized in a number of ways.

Pay the full amount in advance
You have the option of paying a minimum amount due each month. Usually this is 5% of your fees. Except for purchases at EMI, always pay your installments in full every month. This is especially important if you are going to go crazy with your holiday shopping.

May affect other loans
If you are also looking for other loans, such as a home financing or a car loan, make sure the holiday shopping fees have been paid for your credit card fees. Otherwise, the installments will lower your credit score, which could increase the interest rate you pay on new loans.

Compare loan options
Credit cards are perfect for medium purchases, usually below 1 lakh. Installments can be settled in one go or in a few months, and interest can be minimized. However, if you need a much larger loan that you want to pay off in a period of 12 to 60 months, you are better off applying for a personal loan. Interest rates will be much lower.

Keep track of credit use
It’s easy to lose sight of your holiday spending. That’s why you need to keep track of what you’ve spent, where your spending limit is, and when your due date is. If you detect any unrecognizable transactions, report them to your card provider immediately.

Check your credit score
Responsible credit behavior involves regularly monitoring your credit score. You can take free monthly checks of your score online. This is especially necessary after a season of big credit card spending, because it has the potential to lower your score.

The writer is the CEO of BankBazaar.com

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