The festive season of Diwali fills the air with excitement. Shops are decorated, and discounts are everywhere.
But in this festive rush, many people overspend using credit cards or personal loans, leading to a drop in their credit scores and financial stress after the celebrations.
To keep your finances and happiness intact this Diwali, follow a few simple yet important tips. With some discipline, planning, and smart shopping, you can enjoy the festival while maintaining a healthy credit score.
1. Set a separate festive budget
Create a special Diwali budget apart from your monthly expenses. Fix limits for gifts, shopping, and decorations. Divide your list into “essential” and “optional” items—complete the essentials first.
Use cash, UPI, and credit cards wisely to avoid maxing out your credit limit. For example, if your income is ₹50,000, try to keep your Diwali spending within 20–25% (around ₹10,000–₹12,500).
2. Shop smartly, not excessively
Don’t fall for every discount tag. Always compare prices before buying. Purchase expensive products like mobiles or laptops only if you have a proper EMI or credit repayment plan.
Avoid buying unnecessary items just because they are on sale. If your credit limit is ₹1 lakh, spend only up to ₹30,000 (30%) in a month—this helps improve your credit score.
3. Pay your credit card bills on time
After Diwali, many people delay bill payments thinking they’ll clear them next month. This is a big mistake.
Avoid paying only the “Minimum Due” amount—always pay the full bill. Turn on auto-pay to prevent missing the due date. Late payments attract heavy interest and lower your credit score.
4. Don’t miss EMI payments
Skipping even one EMI for your home, car, or personal loan can quickly reduce your CIBIL score.
Keep enough balance in your account before the due date. You can also set SMS or app alerts to remind you of upcoming payments.
5. Check your credit report regularly
Fraud cases rise during the festive season. Unauthorised transactions or reporting errors can go unnoticed.
Download your credit report monthly from CIBIL or Experian. If you find mistakes, request a correction immediately.
6. Avoid applying for multiple loans or cards together
Banks and NBFCs offer many Diwali deals, but applying for several loans or credit cards at once can harm your score.
Each application triggers a “hard inquiry,” slightly lowering your score. Limit yourself to one or two applications and choose wisely.
7. Keep your old credit card active
Some believe closing old credit cards reduces risk, but it actually shortens your credit history and may lower your score.
If the card has no annual charges, keep it open. Use it occasionally and clear payments on time.
8. Use your festive bonus smartly
Don’t spend your entire Diwali bonus on shopping. Use part of it to clear EMIs or outstanding bills. This improves your debt-to-income ratio and positively affects your credit score.
9. Avoid co-borrowing or being a guarantor unnecessarily
If a friend or relative asks you to co-sign their loan, think carefully. If they miss payments, your credit score will also suffer. Agree only if you completely trust the borrower.
10. Don’t ignore long-term financial planning
Diwali should not just be about spending but also about wise financial planning. Save before you spend.
Use credit cards only when needed. Invest in SIPs, fixed deposits, or other options to build financial stability.
Conclusion: Celebrate responsibly, protect your score
It’s perfectly fine to spend during Diwali—but not recklessly.
With smart budgeting, timely payments, and financial discipline, you can enjoy the festival and keep your credit score strong.
