Beware of the urge to splurge

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The festive season is here. There is an urge to spend in the air. Banks are offering cheaper loans than before, coaxing and cajoling citizens to take credit cards and spicing up the offers with freebies. Not a day passes without at least a banking representative earnestly enquiring whether one needs a credit card that has ‘irresistible’ offers. Marketers of different products and services are sweetening deals. There is not a single product or service that does not come bundled with something “free” or “extra”. It is impossible to walk a 100-foot stretch in any city of the country, leave alone walk in a shopping mall, without being bombarded with special offers that tickle one’s expenditure glands.

Topping all this is the charge of the buy-now-pay-later (BNPL) brigade. Though the culture of EMIs was popularised decades ago, the BNPL momentum has heightened like never before. From food delivery to travel, consumer durables to online grocery, BNPL is galloping away. Between 2021 and 2028, the segment is projected to grow at an astounding CAGR of 28.9%.

There is also a quiet endorsement from the bigger picture. Policymakers and economists would whisper into one’s ears that as the economy struggles to emerge from the pandemic’s paralysis, it is almost a holy duty to spend since rising consumption would help the economy to heal and put bread in someone’s plate.

It is tempting to give in to the urge to splurge. And many have already fallen for it. The urge to spend has risen to such an extent that terms like ‘revenge spending’ have come into circulation. The well-heeled class has nothing to worry about. But for the rest, it is important that one should think twice before spending because it always has an impact on the wallet. No matter how sweet the deal is, the customer has to pay eventually. Experts are continuously cautioning us that the third wave cannot be ruled out and secrets of the virus are yet to be unravelled. So, look before you (over)spend.