Credit card mistakes Gen Z must avoid: Axis Bank expert shares five habits for financial success
From paying credit card bills on time to avoiding unnecessary purchases and online fraud, young consumers need to develop responsible spending habits early. Axis Bank's Vinit Bajaj explains five practices that can help Gen Z build a strong credit profile and avoid costly financial mistakes.
- Nov 14, 2026,
- Updated Nov 14, 2026 12:49 PM IST
Credit cards are increasingly becoming an important financial tool for Gen Z consumers, offering convenience for online shopping, travel bookings, subscriptions and everyday purchases. However, financial experts caution that careless spending, delayed repayments and inadequate security measures can turn this convenience into a costly financial burden.
According to Vinit Bajaj, Group Head – Acquiring & Cards, Axis Bank, developing responsible credit card habits early can help young consumers establish financial discipline, build creditworthiness and strengthen their long-term financial position.
Spend within your budget, not your credit limit
One of the biggest mistakes young cardholders make is treating their credit limit as additional income.
Bajaj recommends viewing credit cards as payment instruments rather than an extension of purchasing power.
Before making a purchase, consumers should ask themselves whether they would spend the same amount if it were immediately deducted from their bank account.
The objective is to ensure spending remains aligned with monthly income, financial goals and repayment capacity.
MUST READ: Your chatbot just got a credit card: OpenAI launches ChatGPT Wallet for autonomous shopping
Pay the full outstanding amount on time
Timely repayment is essential for maintaining a healthy credit profile. Missing payment deadlines can attract penalties and negatively affect credit scores.
Bajaj cautions against paying only the minimum amount due, as the remaining outstanding balance can accumulate substantial interest charges.
Over time, revolving credit card debt can significantly increase borrowing costs.
He recommends enabling automatic payments or setting reminders to ensure the entire outstanding amount is cleared before the due date.
A strong repayment history can also improve eligibility for future loans and potentially better borrowing terms.
Don't overspend to earn rewards
Cashback, reward points, festive discounts and promotional offers can make credit cards attractive, particularly during online sales.
However, Bajaj advises consumers against making unnecessary purchases simply to qualify for rewards.
Instead, cardholders should select products that match their existing spending patterns and use rewards on planned purchases.
Preparing a budget before major shopping events can help prevent impulsive expenditure. Track even small transactions Frequent food deliveries, subscriptions, in-app purchases and online shopping can gradually strain monthly budgets.
Bajaj recommends regularly reviewing credit card statements and transaction histories to identify avoidable expenses.
Banking applications offering spending summaries, real-time alerts and payment reminders can help consumers monitor expenditure and maintain financial discipline.
ALSO READ: Cashback, reward points and gift cards: How to cut your gifting budget without compromising on value
Stay alert to digital fraud
Despite their familiarity with technology, Gen Z consumers remain vulnerable to online scams and fraudulent transactions.
Bajaj advises cardholders never to disclose their CVV, PIN or OTP and to transact only through trusted platforms.
He also recommends using card-control features to disable international transactions when they are not required.
Suspicious transactions should be reported immediately to the card issuer.
Ultimately, Bajaj emphasises that responsible credit card usage involves spending within one's means, making timely repayments, monitoring expenses and prioritising security. These habits can help young consumers build a stronger financial foundation.
Credit cards are increasingly becoming an important financial tool for Gen Z consumers, offering convenience for online shopping, travel bookings, subscriptions and everyday purchases. However, financial experts caution that careless spending, delayed repayments and inadequate security measures can turn this convenience into a costly financial burden.
According to Vinit Bajaj, Group Head – Acquiring & Cards, Axis Bank, developing responsible credit card habits early can help young consumers establish financial discipline, build creditworthiness and strengthen their long-term financial position.
Spend within your budget, not your credit limit
One of the biggest mistakes young cardholders make is treating their credit limit as additional income.
Bajaj recommends viewing credit cards as payment instruments rather than an extension of purchasing power.
Before making a purchase, consumers should ask themselves whether they would spend the same amount if it were immediately deducted from their bank account.
The objective is to ensure spending remains aligned with monthly income, financial goals and repayment capacity.
MUST READ: Your chatbot just got a credit card: OpenAI launches ChatGPT Wallet for autonomous shopping
Pay the full outstanding amount on time
Timely repayment is essential for maintaining a healthy credit profile. Missing payment deadlines can attract penalties and negatively affect credit scores.
Bajaj cautions against paying only the minimum amount due, as the remaining outstanding balance can accumulate substantial interest charges.
Over time, revolving credit card debt can significantly increase borrowing costs.
He recommends enabling automatic payments or setting reminders to ensure the entire outstanding amount is cleared before the due date.
A strong repayment history can also improve eligibility for future loans and potentially better borrowing terms.
Don't overspend to earn rewards
Cashback, reward points, festive discounts and promotional offers can make credit cards attractive, particularly during online sales.
However, Bajaj advises consumers against making unnecessary purchases simply to qualify for rewards.
Instead, cardholders should select products that match their existing spending patterns and use rewards on planned purchases.
Preparing a budget before major shopping events can help prevent impulsive expenditure. Track even small transactions Frequent food deliveries, subscriptions, in-app purchases and online shopping can gradually strain monthly budgets.
Bajaj recommends regularly reviewing credit card statements and transaction histories to identify avoidable expenses.
Banking applications offering spending summaries, real-time alerts and payment reminders can help consumers monitor expenditure and maintain financial discipline.
ALSO READ: Cashback, reward points and gift cards: How to cut your gifting budget without compromising on value
Stay alert to digital fraud
Despite their familiarity with technology, Gen Z consumers remain vulnerable to online scams and fraudulent transactions.
Bajaj advises cardholders never to disclose their CVV, PIN or OTP and to transact only through trusted platforms.
He also recommends using card-control features to disable international transactions when they are not required.
Suspicious transactions should be reported immediately to the card issuer.
Ultimately, Bajaj emphasises that responsible credit card usage involves spending within one's means, making timely repayments, monitoring expenses and prioritising security. These habits can help young consumers build a stronger financial foundation.