Is credit card mandatory in today’s world?

In today's fast-paced digital world, many young people in India grapple with a common dilemma: Should they get a credit card at all? How much should they spend on it versus using UPI or other payment methods? And most importantly, is a credit card essential for building and maintaining a strong credit score to secure loans easily in the future? To address these questions, leading fintech experts shared their insights in a recent discussion. They emphasized that credit cards have evolved from a luxury to a practical necessity in modern financial life.

A section of financial and fintech experts argues that having a credit card is now essential for most people. Everyday transactions, such as dining out, shopping online, or making e-commerce purchases, become more rewarding when paid with a credit card. Users benefit from a 30- to 60-day interest-free credit period, allowing them to consolidate expenses and pay the full amount at the end of the month. 

On top of that, credit cards often provide rewards like cashback, discounts, no-cost EMIs (Equated Monthly Installments), and other perks. However, they stresses that this convenience comes with responsibility: users must pay bills in full every month, track due dates diligently, and avoid carrying balances that attract high interest rates. For those already disciplined with their finances and managing well without a credit card — perhaps relying solely on debit cards or UPI — the market offers compelling reasons to reconsider. 

First, credit cards provide strong protection against fraudulent transactions. Under RBI guidelines, users have a window (typically within a few days) to dispute charges and get them reversed before the money leaves their bank account, unlike direct debit payments where funds are immediately deducted and recovery is harder. Second, credit cards are invaluable for international travel, where UPI may not work but cards are widely accepted in places like Europe, the US, or Australia.

With the market flooded with specialized credit cards — for fuel, groceries, shopping, international travel, and more — a senior expert from advises against collecting too many. A representative of a leading bank platform compares it to using different tools for specific tasks: one AI for videos, another for spreadsheets. In his own experience, two to three well-chosen cards suffice — one for no-cost EMIs on electronics (like a co-branded BankBazaar card), another for fuel and grocery discounts. The "sweet spot" is having cards tailored to your spending habits, but never maxing them out or using one to pay off another.

Experts acknowledges the real risks, including debt traps where people spiral into high-interest debt by revolving balances or using credit to cover other credit payments. To avoid this, he recommends building good habits: pay the full outstanding amount on time every month. Consistent on-time payments for even 6 months can boost your credit score significantly, often by 20-30 points. Key guardrails include keeping credit utilization below 30% of the limit (spreading spends across multiple cards helps), prioritizing bill payments before discretionary expenses, and remembering that a credit card doesn't provide "extra" money — it simply helps spend existing funds more smartly.