A Credit Card for online shopping: A smart move or an unnecessary burden?

Shopping online today has become second nature to everyone. And why not? With multiple e-commerce platforms, you can be in your pyjamas, sipping chai, and still fill up your cart. Snagging the occasional item on Myntra or buying your monthly essentials and groceries from Swiggy Instamart—online shopping has become a go-to retail therapy.

While you should focus on what you are buying rather than HOW you pay for it, the payment mode also matters. For all your shopping excursions, credit cards are your best bet. You can earn rewards and cashback with added security. But if you are already among the ‘smart people’ using a credit card for shopping, have you considered a separate card for online shopping?

Let’s explore the advantages of a separate credit card for online shopping.

Advantages of a separate credit card for shopping online
 

Here are some key advantages of having a separate credit card when shopping online: 

Enhanced security
 

Today, phishing scams are becoming common. Your card details can be accessed, and your accounts can be hacked. 

But if you use a separate, exclusive credit card for shopping online, you reduce the chances and extent of your loss. Your credit card should have a specific credit limit (relatively lower than your primary credit card) for online shopping. You then use this card for online shopping. In the event of a security breach or unauthorised access to your card:

• Losses are minimized due to the lower credit limit,
• Your primary card details remain safe,
• You can immediately block your card without disturbing other transactions because the primary card comes to your rescue.

This clever move minimises the risks associated with your primary card and protects your financial information.to your rescue

Easier tracking of expenses
 

When you use a single credit card for shopping, you have ALL your shopping transactions in one place. Scary? Worry not! Having a separate credit card can help you control your expenses. You can easily track and review your spending patterns, allowing you to identify unnecessary or excessive spending and budget and manage your finances more effectively.

Improve credit score
 

A high credit score can open doors to better loan terms, lower interest rates, and increased borrowing power. It reflects your creditworthiness and responsible financial behaviour. Here are two ways shopping with a separate credit card can boost your credit score:

• If you have a credit card for shopping and a primary card, each will have its own billing cycle and due date. Also, you don't have to make a large payment at once; instead, you can stagger them based on the billing cycle of each card. Timely payments = improved credit score
• Another benefit of having a credit card for shopping online is that it can help lower your credit utilisation ratio (CUR). This is the proportion of used credit compared to the total available credit. Lower CUR on each card = improved credit score

Earn rewards
 

Here are the brownie points. Every credit card includes offers, rewards, and cash back to sweeten the pot. You can leverage these bonuses to maximise your savings and get the most out of your shopping. With IDFC FIRST Bank Credit Cards, you get a plethora of offers and deals like:

• 10% discount on Myntra, Ajio, TATA CLiQ, Levis, and Croma
• 15% off on Plum, TATA CLiQ Palette, and Be Young
• 25% discount on Crocs
• Up to 50% off girls' fashion with BIBA 
• Get 15% off on Zomato and up toupto 40% off from select restaurants on Swiggy
• Up to 22.5% cashback or discounts on EMI Transactions from Samsung Electronics, Oppo, Honda, TVS Two Wheelers, Suzuki Two Wheelers, Dell, Acer, Realme, Reliance Retail, and many more

With IDFC FIRST Bank Credit Cards, you can maximise your shopping experience with 6X reward points on online purchases and 10X on spends above Rs 30,000 in a month. You can redeem these points across various options, such as air miles, gift vouchers, or statement credit. And the cherry on top? These reward points don’t expire and can be redeemed instantly! 

With a separate credit card for online shopping, you not only get these offers and rewards but can  also enjoy numerous other perks like:

• Exclusive access to railway or airport lounges, complimentary movie tickets
• Discounts on dining, travel, movie tickets, and spas
• 0% interest on cash withdrawals
• Conversion of large purchases into equated monthly instalments (EMIs) at no extra cost

These, plus low annual percentage rates (APR) and credit card interest rates starting at 9%, make IDFC FIRST Bank Credit Cards one of the best cards for online shopping.

With these benefits, having a separate credit card for online shopping is not just a convenient payment method but also a smart money move.

Caution while using a separate credit card for online shopping
 

To make the most of this card, one must care for:

• Be mindful of the fees 

An additional credit card might come with a joining and annual fee. So, with two or more cards, these fees can accumulate and reduce the cost-effectiveness of owning a separate card. Solution - lifetime-free credit cards.

• Be aware of debt accumulation risk 

There’s a risk of overspending and accruing debt with a new card. Extra credit might tempt you to use it beyond your original budget, resulting in higher debt accumulation. Solution - a monthly budget and financial discipline.

• Manage multiple cards wisely 

A new credit card for shopping will have a different credit limit, billing cycle, and reward structure. As a result, you will have to manage bill dates for timely payments and monitor credit utilisation ratios across different cards. Such confusion may lead to oversight or late payments, affecting your credit score. Solution: auto-debit.

Should you own a separate credit card for online shopping?
 

This is not a one-size-fits-all solution. It depends on your financial habits and risk tolerance. For example,

• Scenario 1:
  
  

  Are you someone who manages multiple cards? Then, for you, owning a separate credit card for shopping will be a strategic move. The added security and rewards of this card balance out the extra responsibility.

• Scenario 2:
  
  

  On the flip side, if you like keeping your finances simple or worry about overspending, you might fare better with just one credit card that streamlines your finances.

To wrap it up
 

The decision to get a separate credit card for shopping needs thoughtful consideration. Consider the potential benefits and the associated risks. Also, ensure that your choice is in line with your goals and financial well-being.

If you’re thinking about getting yourself a credit card for online shopping, you can explore the range of options provided by IDFC FIRST Bank Credit Cards. With these, you will get access to exclusive benefits that redefine your online shopping. Take a step towards smarter financial choices with IDFC FIRST Bank Credit Cards.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.