Credit Cards Aren’t For Everyone – Here’s Who Should Avoid Them

The rising popularity of credit cards stems from their simple payment process along with associated reward programs. The convenience of ‘pay now and buy later’ has also caught up in a big way with people, especially the millennials and the younger generation, who typically tend to use credit cards for expenses on everything ranging from gadgets to grocery bills in order to maximise the benefits on these cards by way of reward points.

Credit cards can also prove to be a saviour during emergencies. However, if used unwisely, they may put you in a huge financial crisis as credit cards come with a huge rate of interest.

Therefore, credit cards must be used only by financially-prudent people. In essence, those who do not have adequate financial management skills or who are not careful with money would do well to avoid credit cards and use debit cards or prepaid cards instead.

Col. Sanjeev Govila (Retd.), Certified Financial Planner, and CEO, Hum Fauji Initiatives, a financial advisory firm, says that in his experience of guiding Indian investors across various life stages, he has seen how credit cards, though marketed as tools of empowerment, can become traps for those unprepared to use them wisely.

Here are the categories of people who should ideally avoid using credit cards.

People with Poor Spending Habits

The first category includes impulsive spenders—those who chase instant gratification. For them, a credit card becomes a fast pass to financial regret.

“A credit card in the hands of an impulse buyer is like giving a matchstick to a child in a fireworks shop,” says Govila.

Adds Gaurav Sharma, CFO, Taxflick.com: “If you tend to make impulse purchases or struggle to control your expenses, a credit card can lead to heavy debt. There are people who tend to overspend. When such people get easy access to credit, they have the temptation to buy things impulsively that they can’t even afford. The ‘Buy now and pay latter’ option entices them to do so.”

People Already In Debt

Next are those who are already burdened with loans or equated monthly instalments (EMIs). Adding revolving credit at interest rates of 36–45 per cent per annum is like pouring fuel on a fire.

“There are people who are already paying EMIs, and after using credit cards, many times they just pay the minimum amount, which leads them into a debt trap and interest rate of up to 30-45 per cent per annum. Those who cannot pay the full balance due every month, for them, adding credit card to their existing EMI and loans will only worsen the situation, leading to poor credit score,” says Sharma.

Undisciplined Bill Payers

People who fail to manage their credit card payments on time face credit card ownership risks. Their credit score will deteriorate because of late payments and they will face extra costs through late fee charges.

The creditor might also increase the interest rate on the card due which will cause you to pay more money. The cardholders would face more financial pressure because of this situation. Their credit report would suffer damage which would cause their credit score to drop significantly.

People With Unpredictable Income

Those with irregular or unpredictable incomes—such as gig workers or freelancers—may find it difficult to make full payments consistently, leading to a silent erosion of wealth.

Financially Disorganised People

Financially disorganised people—those who routinely miss due dates or believe that minimum payments are enough should ideally avoid using credit cards. “They end up compounding their debt while damaging their credit scores,” adds Govila.

Using Plastic to Project Prestige: Individuals who use credit cards to maintain social prestige or fund emotional voids are walking blindfolded into financial instability.

“A credit card never taught a spender how to save. Choose your tools—don’t let tools choose your behaviour,” says Govila.

Conclusion

A card doesn’t create wealth—it magnifies who you are financially. Without self-awareness and discipline, it can push you into overspending. Credit cards are financial accelerators—they speed up wealth creation for the disciplined and wealth destruction for the vulnerable.

So, before using a credit card, know that a credit card should never be seen as a status symbol or emotional crutch, but a tool of convenience that should be used judiciously.