Shopping, gifts, travel: How to enjoy wedding season without hurting your credit score

The wedding season typically sees a surge in discretionary spending. The family members of individuals entering wedlock have to holistically bear the expense of gifts, outfits, celebrations, and travel, which takes centre stage. This results in stretching monthly budgets.

Given that festivities are unavoidable, reckless behaviour can still result in permitting expenses spiralling out of control. Such a situation can further weaken one’s financial stability and harm their future borrowing potential and credit scores.

This makes it critical for aspiring borrowers to plan expenses well in advance and keep borrowing through personal loans under control to maintain a healthy credit profile.

Pranjal Date, Head of Cards & Payment at Zaggle Prepaid, says, “To keep your credit score intact during wedding season, budget smartly, keeping credit utilisation low, paying all EMIs and bills on time. Don’t overburden yourself by taking loans which strain your monthly outflows. Do not withdraw cash from credit cards as the same attracts heavy charges.”

Plan smartly

Proper long-term debt management and planning is the first step to protecting your credit profile.

1. Set a sensible and realistic spending limit aligned with your income.
2. Carefully track all wedding-related expenses through digital applications and tools to avoid mistakes and overspends.
3. Focus on essential purchases first and avoid going ahead with impulse-based buying that results in unnecessary borrowing and credit use.

Manage credit wisely

A healthy credit score, i.e., any score over 750, depends heavily on maintaining an appropriate credit utilisation ratio.

1. The goal should be to keep the credit utilisation ratio below 30% of your total limit.
2. Big ticket expenses on the wedding, such as luxury watches, clothes and other associated products, should be spread properly across multiple credit card billing cycles.
3. Go ahead with a temporary credit limit enhancement if you have a strong repayment history.

Stay punctual and avoid high-cost behaviour

Payment discipline is extremely critical, especially during high-spend months.

• Clear out all personal EMIs and credit card bills before due dates to avoid penalties, interest accumulation and fines.
• Ensure that you avoid minimum payments as interest compounds and raises long-term costs, making borrowing expensive.
• Strictly refrain from cash withdrawals on credit cards due to steep fees and immediate accumulation of interest.

In conclusion, by planning wedding expenses such a clothes, venue, food, etc diligently and managing other expenses prudently and steering clear of costly financial mistakes, one can enjoy the wedding season to the fullest without compromising their creditworthiness.

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