Diwali 2025 Credit Card Tips: With the arrival of Diwali, markets and online sales are flooded with offers. Everyone seems to be in the mood to buy a new gadget, smartwatch, iPhone 17, or luxury car. But if you're thinking of maxing out your credit card limit this festive season, consider this. Doing so could be detrimental to both your financial health and credit score. Experts say that unplanned spending on occasions like Diwali can create a debt trap, which can be very difficult to escape later.

The debt burden may increase during Diwali.

Many people use credit cards to purchase gifts, gold, clothing, and electronics during the festive season. But when expenses exceed income, it weakens your credit profile. If payments aren't made on time, interest rates, late fees, and penalties can be a huge burden on your pocket.

Credit card interest rates in India range from 12% to 45% annually. If you don't pay your card bill in full on time, compound interest accrues on that amount every month. Overspending and defaulting frequently cause credit bureaus to lower your credit score (CIBIL Score).

Why Filling Your Credit Card Limit Is Harmful
Credit Score Decreases: When you use 80-90% of your card limit, your credit utilization rate increases, lowering your score.
Increases EMI Burden: Shopping without thinking on EMI can put monthly payments under pressure.
Late Payment Penalties: If bills are not paid on time, both late fees and interest will be charged.
Impact on Future Loan Eligibility: If your score drops, it may become difficult to obtain a home loan or car loan in the future.

The Truth About No-Cost EMIs!
Many platforms sell products with "No-Cost EMI" tags as Diwali offers, but they actually include processing fees, GST, or hidden charges. So, carefully read the terms and conditions before choosing any offer.

5 Easy Tips for Smart Budgeting
Set a budget: Set a spending limit in advance and stick to that limit.

Use reward points: Pay with your old reward points instead of taking additional credit for new purchases.

Use a debit card or UPI: This will debit your account directly, preventing debt from increasing.

Monitor your billing cycle: Avoid missing payment dates.

Consult a financial advisor: If you're unsure about your expenses, it's wise to consult an expert.

Diwali is a festival of joy and lights, not debt and stress. Prioritize saving and prudence over spending under the guise of a festival. If necessary, opt for a secured credit card or festive savings plan to ensure financial stability in the future.

Buying gold and silver, a new phone, or a car are all good things, but only if they're within your financial means. Celebrating the festival by racking up debt may bring immediate joy, but can lead to long-term problems. The true meaning of Diwali is celebrating with loved ones in a peaceful and balanced way, not swiping your card to the limit.

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