Diwali Shopping on Credit Cards? Here’s How Festive Offers Can Backfire

Diwali Shopping on Credit Cards: As Diwali 2025 nears, banks, brands, and e-commerce platforms are lighting up your feeds with tempting credit card deals — cashback offers, reward points, zero-cost EMIs, and mega flash sales. It all seems like the perfect way to make your festive wish list come true.

But financial experts caution that behind the glitter of “limited-time offers” lie hidden charges, high interest rates, and potential credit score pitfalls. Without smart planning, your Diwali shopping spree could turn into months of unwanted debt.

Here’s what to watch out for before you swipe.

1. The Hidden Reality of “No-Cost” EMIs

The phrase “no-cost EMI” sounds appealing — but it’s rarely truly free. Often, the interest is built into inflated product prices or disguised as processing fees.

What seems like a small monthly payment can stretch your budget for months. Miss even one instalment, and you could face hefty penalties and interest charges.

Tip: Always compare the upfront (full) price with the EMI option and check for hidden fees before choosing the plan.

2. Late Payments Can Cost You Dearly

Festive spending can lead to delayed payments — but even a single missed due date can trigger annual interest rates of 30–45%, plus late fees.

These defaults are recorded in your credit report and can damage your credit score for years, making future loans harder to get.

Tip: Pay your full outstanding balance every month. Avoid relying on the “minimum due” option — it only delays the debt while interest keeps adding up.

3. Overspending Beyond Safe Limits

Diwali excitement often pushes shoppers to max out their credit cards. But using more than 40% of your total credit limit can hurt your credit score and signal financial strain to lenders.

Tip: Split large purchases between multiple cards, or combine credit with debit or UPI payments to stay within a safe limit.

4. Beware of “Fake Discounts”

Some festive deals are more illusion than bargain. Sellers sometimes inflate original prices to create fake “big discounts.”

Tip: Cross-check product prices on multiple sites or offline stores. Don’t rush into purchases driven by “only 2 hours left!” banners.

Remember — a credit card is a short-term loan, not free cash. Every swipe comes with responsibility.

5. Avoid Cash Withdrawals on Credit Cards

Withdrawing cash using your credit card may sound convenient, but it’s one of the most expensive mistakes you can make. Interest accrues from the day of withdrawal, and banks often charge 2–3% transaction fees on top.

Tip: Use this feature only for genuine emergencies — never for festive shopping or casual expenses.

The Bottom Line

Diwali is a time for joy, not debt. Smart use of credit cards can enhance your festive experience, but impulsive swiping can dim the lights long after the celebrations end.

Read the fine print, track your expenses, and pay your dues on time. Because true financial prosperity means celebrating without the burden of hidden costs.