India's festive season is not just about joy and celebration; it's also a period of increased economic activity fueled by consumer spending. This year, a notable trend has emerged: the rising importance of credit scores in shaping consumers' shopping experiences. With attractive discounts and offers from both big and small brands, consumers are eager to make significant purchases, and credit is playing a crucial role in enabling these aspirations.

The festive season, spanning from Dussehra and Diwali through Christmas and New Year's, traditionally sees a surge in demand for consumer durables, automobiles, jewelry, and travel. This heightened spending is facilitated by the availability of various credit options, ranging from traditional bank loans to credit cards and instant consumer finance. Consumers are increasingly leveraging credit to "buy now, pay later," allowing them to enjoy experiences and acquire desired items without immediate cash constraints.

The accessibility of credit is not only empowering individual consumers but also playing a vital role for Small and Medium Enterprises (SMEs). These businesses often require short-term financing to increase production or inventory in anticipation of the festive season demand. Credit provides them with the necessary capital to meet this surge in demand before sales revenues start flowing in.

Notably, online shopping has become increasingly popular during the festive season, with a survey indicating that 85% of credit card users in India prefer e-commerce platforms to maximize savings. The surge in online shopping is attributed to the attractive discounts and special offers available during festive sales. Many shoppers strategically plan their purchases around these online sales to take advantage of credit card promotions and other deals.

The increasing reliance on credit during the festive season has led to a substantial rise in credit card spending. October saw a 19.6% year-on-year increase in credit card expenditures, driven by strong e-commerce sales and festive purchases. However, new credit card additions have slowed down, indicating a potential shift towards more selective credit card acquisitions.

While credit offers numerous advantages, including cashback, discounts, and reward points, it's crucial to use it responsibly. Financial experts advise consumers to be mindful of their spending and avoid falling into debt traps. Credit is borrowed money, not additional income, and the discounts of today should not turn into the debts of tomorrow. Smart financial planning ensures that festive enthusiasm lasts long after the season has passed without being a debt trap. Paying credit card bills on time is essential to maintain a good credit score and avoid losing reward points.

In conclusion, credit scores are becoming increasingly important during India's shopping season, influencing consumers' ability to access credit and take advantage of festive offers. While credit can be a valuable tool for fulfilling aspirations and boosting economic activity, responsible financial planning is paramount to ensure a happy and debt-free festive season.