‘Swipe to get richer, not to feel rich’: CA on turning credit cards into a money tool

In a world of easy swipes and instant gratification, credit cards often walk a fine line between being a financial trap and a powerful wealth-building tool. For many, they represent the illusion of affordability. But according to Chartered Accountant Nitin Kaushik, when used with discipline and strategy, credit cards can actually work for you—not against you.

“Most people swipe to feel rich. Few swipe to get richer,” Kaushik notes, stressing that the key lies in how you use the card—not just what you spend it on.

Here’s how to turn your credit card into a smart financial ally:

1. Understand the illusion:
Swiping is easy, but repaying can become a burden if you’re not cautious. Many fall into the trap of thinking they can afford more than they actually can, simply because credit is available. Kaushik warns that this illusion is the starting point of most credit card debt cycles.

2. Use the grace period like a pro:
Credit cards typically offer a 45- to 50-day interest-free period. If timed correctly, this essentially functions as a short-term, zero-cost loan. Strategically planning large purchases just after your billing cycle starts can help you maximise this benefit.

3. Always pay the full amount:
Avoid the temptation of paying just the minimum due. “Minimum due is a trap. Full payment is the escape,” Kaushik says. Carrying forward even a part of the balance attracts high interest rates—often exceeding 36% per annum.

4. Leverage rewards and perks:
Disciplined users can benefit from cashback, air miles, lounge access, and other rewards. These benefits are free for those who pay on time and in full. Stacking rewards smartly can translate into real savings over time.

5. Think twice before converting to EMIs:
While EMI options are tempting, Kaushik says they often favour the bank more than the user. Unless you’re using an interest-free EMI on a high-value essential purchase, these should be avoided.

Rising credit card debt paints a cautionary picture

In 2024 alone, credit card defaults in India jumped by 28.42%, with non-performing assets (NPAs) in the segment reaching ₹6,742 crore—a ₹1,500 crore spike over the previous year. Over five years, credit card NPAs have surged over 500%:

2020: Rs 1,108 crore

2021: Rs 3,182 crore

2022: Rs 3,887 crore

2023: Rs 5,250 crore

2024: Rs 6,742 crore

During the same period, outstanding credit card loans more than doubled, from ₹1.4 lakh crore in 2020 to ₹2.92 lakh crore in 2024, underlining the rapid rise in consumer debt.

“A credit card, in the right hands, is a tool for free money,” Kaushik says. “In the wrong hands, it’s a spiral of debt.” Financial maturity—not just access—is what determines whether you win or lose with plastic money.

So, be the adult. Not the victim.