I know some of the female readers going through the following joke will be put-off (some might find it politically incorrect too) but quite a few may smile knowingly! Men mostly will sigh and nod (wryly) in agreement. So read on:
A man lost his credit card; he did not complain to the police for a couple of months. The wife told the husband number of times to do so. After another such reminder the husband remarked “I am okay with it as the thief’s monthly spending is much lesser than when the card was with you.” So is a credit card in a woman’s hand like a dangerous toy in a child’s hand?
Shopping, Credit Cards and Women!
Being a woman myself I know the sale and festival shopping frenzy grips us women more than it grips men. When we see a 50% off pamphlet our mind does get a high and we do miss to read the fine print which says “up to 50% of on select items”. When we reach the shop we rarely find anything worth buying or something that fits within the “50% off range”. But believe me it’s not possible to leave a store without buying something so we look around and end up buying more stuff because it was on sale. I need a dress that’s almost a 1000 bucks but I buy two trousers worth 1600 because there’s a 20% discount on them. And yes I still need the dress! Sounds confusing? Yes we are also once we reach home but when you are in the shop where is the time for calculations?
Credit cards whether in men’s or women’s hands do encourage shopping a little more recklessly then when you are paying by cash. Men may spend without planning or splurge on different things but for women it’s mainly shopping impulsively without planning or a budget.
If in the above example if I take cash for shopping and restrict it to 1000 or 1200 for my shopping I will not be able to buy the additional and non-essential stuff but we love our credit cards and we don’t leave them home when we go out…
Now another dimension has been added to this shopping craze: Online shopping. You name it and the thing is delivered at your door step. They offer attractive options like you can return the stuff if you don’t like it. However you don’t get your money back you get only a credit for the site so you have to buy something again. Maybe sometimes laziness would have helped you save money but thank the internet and the credit card now you can buy fancy designer bags and jewelry sitting at home in you pajamas.
As per a survey conducted by TransUnion in America 80% shoppers make some purchases for the holiday season on credit cards yet 60% said that they had not thought about the risk of overspending. Only 40% shoppers had fixed a budget for buying gifts though mostly (84%) were concerned about the affordability of the gift they bought. (Source: http://www.cbsnews.com/moneywatch/)
So whether it’s India or America falling in debt trap due to shopping recklessly using a credit card is a potent and a realistic threat. This in turn could affect your credit score on short-term as well as long term.
I am sorry but I have to tell you whether it’s online shopping, sale frenzy, festival time or just beating the blues shopping; bills have to be paid at the end of the month and they have to paid on time. So ladies just follow a few simple rules; after all you don’t want to lose a dream home (loan rejected due to bad cibil score) as you could not resist the temptation to pick up a designer bag.
• Make a budget for your shopping especially when you shop for occasions like marriages and festivals.
• In case you are unable to resist temptation pay by cash and carry just the required amount with a little surplus
• Also plan your monthly shopping in advance. In case you need a few high priced items then spread them over a few months so that at the end of any month you are not stuck with an unpaid bill.
• Keep a track of what you have already charged to your credit card in a month; in case it’s on the higher side postpone some non-essential shopping to the next month.
• Be sure of your billing cycle; pay on time.
• Do not have too many credit cards as they confuse you and it’s easier to default on monthly payments and overspend with multiple cards.
Shopping is fun and is our birthright but responsible shopping with a credit card is the requirement of the hour. Falling in a debt trap is easy; snapping out of it is not and erasing the bad credit history is really difficult. So shop on but with a caveat!