Thinking of swiping your credit card for a birthday bash? 5 reasons to think twice

Celebrating your birthday in style and with a lot of enthusiasm is exciting but swiping your credit card to fund the same might not be the smartest move. While credit cards do provide instant gratification, they also carry the risk of high interest, rising debt, and credit score damage that can linger long after the party ends.

Echoing this, Saurabh Bansal,founder, Finatwork Investment, says, “Using a credit card for your birthday might feel convenient, but it can lead to lasting debt. High interest, impulsive spending, and the minimum payment trap often turn short celebrations into long-term financial stress. Think beyond the moment—your credit health depends on it.”

Hence, before you swipe, check out five important warning signs:

1. High interest rates can ruin the party

The outstanding balance on your credit card can attract steep interest rates. This figure can be anywhere from 30% to 42% per year, if it is not paid in full. That fancy birthday dinner or weekend celebration might feel worth it, only in the moment, but over time, the interest can balloon into serious debt, making it tough to manage your finances.

Warning against this growing trend, Vibhore Goyal, Founder of OneBanc, says, “A dangerous idea is being sold as smart money advice—borrow cheap and then spend and invest your income. But the truth is different: credit card NPAs have jumped six times in four years, and total dues now cross ₹2.9 lakh crore. With credit-on-UPI, even a ₹100 auto ride can go on credit. It feels easy, but it builds fake wealth and future stress. This isn’t smart, it’s risky by design.”

2. Overspending is easy and addictive

It is lucrative and tempting to go overboard while celebrating life milestones such as birthdays, anniversaries among other celebrations still credit card usage for such events can distort your sense of affordability. If you are not particular about tracking your expenses and spending properly then you may find yourself with a bloated bill and no clear repayment strategy. Such a situation can also punish you and push you in an endless debt trap.

3. Minimum payment trap

Making the minimum payment might appear to be easy and manageable initially, still it can force credit card users to submit themselves into an endless debt trap. This happens as interest keeps on piling up and your repayment journey gets stretched unnecessarily.

4. Credit score can take a hit

Utilising more than 30% of your credit card limit can hurt your credit score. A one time celebration can bring down years of disciplined credit behaviour. Especially in cases where repayment gets delayed.

For example, if your credit card limit is ₹1,00,000 then do ensure that you never use more than ₹30,000 of this credit limit. As this will indicate over reliance on credit and can hamper future loans and damage your credit profile.

5. Missed EMI conversion opportunity

Several banks permit big purchases to be converted into EMIs but not all expenses (for example salons and restaurants) qualify for EMI conversions. That is why if you conduct a birthday party on your credit card without discussing with your credit card issuing financial institution then you may even end up with a lump sum bill you hadn’t planned for.

Hence, a memorable birthday doesn’t mean irresponsible spending and use of credit cards. It should never come at the cost of financial stress. That is why always keep these simple factors in mind and plan within your means, use your credit card smartly and always have a well planned repayment plan. Celebrations fade but debt can linger.

Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.