Credit card: Don't use till you go down

It's already late for Christmas shopping, and you may be tempted to rush in to fill your Santa bag and end the spree with a swipe of your credit card.



Here's an oft-repeated caution message to keep your Christmas merry: Reckless indulgence can mar your New Year happiness.



Sale will be the flavour of the season. Shops will offer rebate. And banks will reward credit card users with redeemable points. A perfect time to pamper yourself. Credit card holders can also avail discount benefits at petrol pumps, travel websites, hotels and resorts.



These offers can entice credit card customers to indulge in impulsive shopping, which money experts strictly warn against. "Never shop beyond your means. Make a budget and stick to it," advises Kartik Javeri, director, Transcend Consulting, a personal finance company in Mumbai. Budgeting can help avoid unnecessary expenditure.



Banks give their credit card users a free period to repay the money. This free period ranges from 30 to 40 days. However, credit card holders should remember that there is nothing called a free lunch and banks charge hefty penalty on late payments.



Withdrawing cash from ATM using a credit card is also a bad and avoidable idea. Banks charge two kinds of fee on such withdrawals. Banks take fixed fee which ranges between Rs 250 and Rs 300 on each withdrawal using a credit card.



While planning holidays, some travel portals offer discounts to credit card users. Hotels and resorts also bestow special privileges to card holders. Hotels in Manali



In such cases, a credit card should be used only if the user sees a replenishment in the near future, by the way of bonus or arrears, suggest financial advisers.