With its cultural significance, the festive season is seen as an auspicious time for purchases. It is also that time of the year when various brands offer lucrative discounts on big-ticket items such as household appliances, electronics, and even vehicles.
A credit card can be handy if you want to save further on your festive purchases. Many banks and credit card issuers offer additional discounts during the festive season. Some online financial marketplaces let you compare different credit cards and apply for one too. If you want to maximise your savings this festive season, here are five ways your credit cards can help you.
1. Specific cards can fetch you additional discounts
Brands often partner with lenders and credit card issuers to offer additional discounts through cashback, accelerated reward points, etc. These discounts are usually over and above the discount already offered by the brand. For instance, a product priced at Rs 10,000 comes with a 10% festive discount which lowers its price to Rs 9,000. On top of this, holders of a certain credit card can avail of a further 10% discount on this product which fetches them more savings.
2. Make purchases at the start of your credit cycle
Plan your purchases for the start of your credit cycle. This way, you will have a minimum of 30 days to settle the outstanding balance. However, ensure you pay your bill within the due date to avoid late fees and interest penalties.
3. Use reward points
The festive season is a great time to redeem accumulated reward points on your card to save on purchases. Keep track of the reward points on your credit card so you may utilise them to make part payments on your purchases or save on them with cashbacks.
4. Avail no-cost EMIs on credit card purchases
No-cost EMI or zero-interest EMI is a popular repayment facility which allows you to pay for your purchase in interest-free instalments. You can use this facility to make your high-value purchases more affordable without upsetting your budget.
5. Use credit cards offering the maximum reward
Reward points are among the most popular benefits of owning a credit card and can help maximise your savings. The points you earn with different purchases can depend on your card. For example, some premium cards offer one reward point for every rupee spent compared to regular credit cards, which may offer one to ten reward points for every Rs 100 spent. Certain credit cards offer 2x to 5x reward points on purchases or a higher cash value for each reward point than a regular credit card.
Adhil Shetty, CEO, BankBazaar.com, says, “The festive season is when many people make high-value purchases. Using your credit card for such purchases allows you to earn higher reward points which can either be redeemed as cash back or used to avail discounts for future purchases.”
Credit cards are excellent for saving during the festive season if used correctly and smartly. There are some ways you can do so. First, avoid exceeding your allotted credit limit. If you have multiple credit cards, use them to spread out your purchases to stay within your credit limit. Second, maintain a credit utilisation ratio (CUR) of up to 30%. Credit utilisation ratio (CUR) is the proportion of the total credit limit used versus the total credit limit allotted. A higher CUR can depict you as credit-hungry and negatively impact your credit score.
* Redeem accumulated reward points to save on purchases this season
* Look out for credit cards that offer additional discounts on specific brands/ stores
* Make your high-value purchases affordable with no-cost EMIs
* If you have multiple credit cards, use them to spread out your purchases