Don't let discounts, reward points, cashbacks fall you into a debt trap

The online stores offer discounts, reward points and cashbacks to lure customers, and beat competition during the festive seasons. Some even offer an EMI facility on certain purchases which means you can buy now and pay later in installments. This can lead to impulsive shopping which in turn can put you into deep financial trouble. Here are a few things you must keep in mind while shopping online.Set A Shopping PlanPrepare a shopping list and stick to it. Do not get carried away by the convenience of shopping remotely and the attractive deals in offer. Ask yourself if you really need it before you click on that 'buy' button. This would help you refrain from overspending. The ease of virtual window shopping without having to drive around the busy city streets and the option of buying first and paying later has the potential to tempt you into shopping beyond your means. A well-prepared budget and a pre-planned shopping list to fit in that budget are the key to keeping spending under control.

Careful In Using Credit CardsOnline stores often offer attractive deals on use of certain Credit Cards. However, before you jump the gun, check your due date and assess if you can repay for the product within the credit period. Also don't pick up a product based on the offers on Credit Cards and zero EMI facility without reading the fineprint. Sometimes, the Credit Card companies add the processing charges and interest to the product cost. You might find the same product at a cheaper rate in another portal. So, run your research before you finalise a product.

While shopping on credit card, make sure you don't exhaust more than 30% of the total credit limit. A higher credit utilisation ratio on a constant basis may make you look credit hungry, thus negatively impacting your credit score. Have a repayment plan in place before you buy something using a Credit Card as the interest could go as high as 35% and defaulting or delay could knock down your credit score.Maintain Minimum BalanceMost times your Debit Card or net banking account is set to be the default payment mode with online stores and mobile wallets. Therefore, most transactions are carried out from these accounts. If you are someone who indulges in impulsive shopping binges, you need to keep track of the erosion you are causing on the balance in your account. Most banks levy harsh penalties on customers if a minimum balance is not maintained in their savings account. Delivery Charges Push You For MoreThe imposition of delivery charges on purchases below a certain limit pushes consumers to buy more to avail free delivery. This often leads to buying things that are not needed at that moment. In order to waive off this cost, you must keep the limit in mind while making purchase for the things you need. If you are unable to reach the minimum limit with the things you need to purchase, you must wait till you need to purchase other things and add to the cart. Online shopping can actually help you save money if done the smart way. So, go for it but stay within your budget and don't go overboard with your spending.

(The views experessed by the author are personal)