What is Core & Satellite strategy?

As the festive season starts, we often tend to go on a shopping spree. The tendency is to dip into your credit cards rather than savings for retail therapy. With lucrative reward points and handsome cash backs, a credit card is a good financial instrument when it comes to shopping. But it comes with a lot of financial discipline. Wayward usage of credit cards has a lot of downsides and will come with additional financial burden and will seriously impact your credit score.

Online shopping festivals are great. They lure credit card users during this festive season. With merchants and banks doling out offers, it is hard to control the temptation of swiping your credit cards. But please be mindful of the fact that your financial health comes first. This festive season, please be mindful of the following five factors when you go on a shopping spree with your credit cards.

Always set a budget: The biggest factor behind maintaining good financial health is the budget. Please set a budget that will help you in determining how much you can afford to spend during the festive season. The credit card should help you in managing finances within your budget and not lure you into overspending. To ensure that you don’t overspend, please keep a track of your all spends and make sure you record them in one place.

Choose the right credit card for shopping: The thumb rule of selecting the right credit cards is identifying the purpose for getting one. If you are a first time credit card user, opt for a card with a low fee that will help you in fulfilling the basic benefits and also help you in building a credit score. Also, if you have existing credit cards that don’t serve the purpose then opt for credit cards to save on a category. There are multiple co-branded credit cards that would help you save while shopping on online platforms with value-back, rewards, cashback or discount, or a combination of these. Also, analyse the fee charged for respective credit cards. For example, an entry level credit card with a high annual fee is not a great proposition. But if the high annual fee is compensated by welcome, renewal, milestone and other benefits, you must opt for it.

Avoid cash withdrawals for shopping: It is not a smart move to withdraw cash from credit cards for the purpose of shopping. The cost involved by way of interest rates and fees is quite high. It is always a wise move to debit cards or withdraw cash from an ATM for your shopping purpose. Dipping into cash through credit cards should be the last resort only.

Monitor your spending during the festive season: During the festive season, we often forget to keep a track of spending. But during a shopping spree, it is always wise to review your monthly statements regularly. This will help you stay within your budget and identify any unauthorised or incorrect charges. If you come across any discrepancies, contact your credit card issuer immediately to report the issue.

Avoid falling in the trap of high-Interest debt during the festive season: Never pay minimum balance. It is a trap that many fall into. Always try to pay off your credit card balance in full each month. If you don’t it will attract accumulating high-interest debt. However, if you still can’t then at least try to pay more than the minimum payment to reduce interest charges. Some credit cards also come up with options of deferred payments for a certain period during the festive season. It may sound great but be aware of the fact that interest may still accumulate during this time, so use this feature cautiously.

Credit cards are great but it is an art to use them wisely. If your credit cards offer good rewards, never shy away from using them to the max during the festive season. But always remember that responsible credit card usage is essential to ensure you have a stress-free and financially secure festive season. By following these tips you can enjoy the good festive season without falling into excessive debt.

About the Author:
Manish Shara is a visionary entrepreneur and accomplished business leader with a passion for innovation and technology. As the Co-founder and CEO of ZET, a pioneering fintech company that is driving financial inclusion in India’s Tier-2, 3, and 4 cities. Under his visionary leadership, ZET has established itself as a prominent player in the fintech industry. Manish’s leadership style is characterized by his ability to inspire and lead teams to achieve remarkable results.
Prior to ZET, Manish held several key positions that enriched his professional journey. He was the Product Head at Dineout (Times Internet) and played a pivotal role in overseeing the product team responsible for web, mobile apps, and CMS platform for DineOut. Manish joined Times Internet in 2014 as a Product Manager of Timecity.com and in a quick span became the Product Head of Dineout.
Manish’s entrepreneurial journey started in 2012, first with RR Technologies that created Elance and Odesk, online bidding and lead generation marketplace. Then in 2013 he launched Offermandi.com, a hyperlocal price discovery platform for offline retail stores. Offermandi received seed funding from TLabs, the investment arm of Times Internet, and later pivoted to Simplify App that connected local SMEs with customers in real time. Manish has an Engineering degree in Computer Science from Rajasthan Technical University.

Manish Shara, Co-founder & CEO, ZET