How to control your impulse purchases?

Indians’ credit card spending in September'2020 soared by 57% on a year-on-year basis to Rs 80,000 crore, according to the latest data from the Reserve Bank of India (RBI).

What led to this sudden increase in credit card spending?

People were cooped up in their houses during the pandemic. Some of the spending through credit cards can be attributed to pent-up demand. During the pandemic, people were spent on their day-to-day and essential needs.

Now that the restrictions have been relaxed, people are satisfying their wants and aspirational goals like travel, white goods, automobile, furniture, etc. While this is helpful for the economy, I would like to say that people should spend with caution.

Normally, people decide to save a portion of the money after whatever they have to spend.


The equation is Saving = Income – Expense.

I would tweak it. People should decide first how much they want to save every month for their different goals from their income and spend whatever is left.


A better version is Income – Saving = Expense.

Spend whatever portion is remaining after saving. It will work wonders if people bring this change in their mindset. That said, this does not mean that you have don’t have to spend. Spend after you have factored in your near-term and long-term goals. Impulse purchases increase when we have the convenience of credit card and EMI options. When making such buying decisions, you need to think if you need it currently or if it can be postponed.

Online payments such as UPI and net banking enable us to transact with ease. Whatever you buy through your credit card, you should have the capacity to pay the bill before the due date in full and not just the minimum due, failing which will attract interest. This is the one thumb rule people should follow when it comes to using credit cards.



Shoutout to Morning Star for the school of thought.

Check out the interview here: Link