Many individuals take help of credit card or personal loan from a financial institution for shopping. But remember that, these two credit products are the most expensive, because of the high interest.

And too much reliance on credit can affect your credit history, either in the short or long term. But here are some basic tips on how to use credit card smartly for shopping without affecting the credit history.

1) Use your card carefully

It’s a fact that there are promotions you can access only if you pay with your credit card. But that does not mean, you should not use credit card. After all, why to stop yourself from saving money in the form of discount.

So what you should do is use it carefully. That is, not to overspend, avoid going beyond 50% of your limit. And make sure your monthly payments don’t represent more than 30 percent of the income.

2) Buy what you need

It’s easy to get the feeling that you can buy anything using credit card especially during shopping season.

However, remember that these purchases, like we do throughout the year, must be reasoned and you should only buy things you really need and not everything you can buy.

3) Do not spend money you do not have

It is common to start paying with a card or to apply for a loan, as soon as the bonus arrives. But this is a big mistake. Since spending money you don’t have can make your bonus go away as fast as it arrives and, besides, you are left with a big debt.

You better make a conscious budget of how you are going to spend it or, if you want to access the offers you can save all year long to make the purchases in advance.

Check out: Tips on investing your bonus

4) Take care of your payments

Your monthly debt payments should be no more than 30% of your income. Keep this in mind, as this will prevent you from becoming over-indebted and affecting your history of late payments.

Remember that the purchases at this time will be added to the payments you already have. So make a list and think about how much more you can pay each month. This will also help eliminate some purchases from your list.

5) Take into account the January expenses

Without a doubt, one of the most complicated moments of the year is the January. Because we have to pay services and taxes and we are very worn out by the holidays.

So, when you make your purchases think that you will have many debts to pay at the beginning of the year. So it is best to save money.

These 5 tips will prevent you from falling behind on your payments or, even worse, leaving some debt behind. Also, if you follow these tips, you will avoid applying for a loan just to make purchases.

Author Bio:

I am Nikesh Mehta, owner and writer of this site.

I’m an analytics and digital marketing professional and also love writing on finance and technology industry during my spare time. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business. I can be reached at nikeshmehta@allonmoney.com or LinkedIn profile.