There is hardly anyone who would have not marveled at the pleasures and comforts of online shopping. Whether it's the everyday groceries or the latest fashion trends or the antique coffee table, all are a click away and ready to be delivered at your doorstep as required by you. However there is always a "but" involved; all the convenience and choice associated with online shopping comes with the lurking danger of falling into a debt trap.
One may wonder why online shopping can potentially lead to a debt trip if doing so at a brick and mortar outlet does not? It is not that when one is shopping physically one cannot fell into a debt trap but online shopping makes it a little easier to get debt ridden. Let’s understand why? When one is shopping trough the traditional made then their choice is limited to the outlet they visit which may restrict the impulsive buying to some extent but this is not the case when shopping online.
A bigger range of choice, constant bombarding of offers with push for newer products can tempt one into buying things which one does not require thereby spending more than they intended to. Since online shopping is done mostly using credit cards, spending more than you can pay will directly impact the user’s credit score and all defaults will be included in the CIBIL Report.
While online shopping is not totally avoidable, one can follow a few simple rules to avoid spending more than they can repay.
Unlike visiting the physical outlets where one is restricted by time and place there is no such restriction when one chooses to buy through shopping sites online. You may be working online or just checking your mail account when a pop-up may spring up offering a lucrative deal which may tempt you to buy something which you do not actually need. The sheer wide range of choice available online with no restriction of time and space to visit them can lead to buying things which one would not have bought if they were to do so by visiting the outlets physically. Avoid the urge to visit various shopping sites out of boredom or due to some offer unless you actually need something and then too stick to your shopping list and resist the urge to keep browsing.
All shopping portals advertise about special weekend or festival sales where big discounts are offered on a wide range of products. This again is a ploy to attract customers into buying things which they may not need. Buying something you don't need because it is at discount can prove to be a big problem if it is done often. This can lead to spending more than one can afford to pay. The same is the case where offers are made if you shop above a fixed amount; buyers may end up buying extra just in order to avail these offers.
Just like online shopping, using credit cards is a two edged sword. Depending too much on credit cards, while making purchases online can also lead to a debt trap. Often sellers may offer the option of converting the billed amount to EMIs, while this may appear like a good option at the time of buying the product it may come back to haunt you later. These EMIs also have to be paid regularly and just like not paying loan EMIs can put you on a loan defaulter list, not paying the card dues can also put you on the defaulters lift and lower the credit rating. Dependence on credit cards can be reduced if the shopper chooses to pay through a debit card, through a linked bank account or pay cash on delivery (if the option is available). This can prevent debt piling up!
All conveniences need to be used responsibly, so be careful while shopping online and you will not end up spending more than you can pay.