Why using a debit card for groceries and fuel is a costly mistake. CA explains why you may be losing out

Most people choose between debit and credit cards based on convenience or a desire to avoid debt. But according to chartered accountant Nitin Kaushik, the bigger financial mistake may actually be using a debit card for everyday spending. In a recent post on X, the finance expert argued that while funding an unaffordable lifestyle with a credit card is dangerous, relying on a debit card for routine purchases such as groceries, fuel and travel could mean missing out on valuable financial benefits.

Why Kaushik prefers credit cards for daily expenses

Kaushik believes many people misunderstand the purpose of credit cards, viewing them only as a borrowing tool instead of a cash flow management tool. He explained that a debit card immediately deducts money from a user's savings account at the moment of purchase. A credit card, on the other hand, allows users to spend the bank's money and repay it later, often enjoying up to 45 days of interest-free credit if the full statement amount is paid on time.

According to him, this gives users greater flexibility without locking up their own cash, provided they remain disciplined with repayments.

Better protection against fraud

Kaushik also highlighted consumer protection as a major advantage of using credit cards. He pointed out that if a fraudulent transaction occurs on a debit card, the money is immediately deducted from the account holder's savings while the investigation is underway. With a credit card, however, the disputed amount belongs to the bank until the issue is resolved, reducing the immediate financial impact on the cardholder.


For this reason, he suggested using credit cards for everyday spending categories such as groceries, fuel and travel.

Rewards that debit card users often miss

Kaushik also argued that credit cards are designed to reward users through cashback, reward points and travel benefits funded by merchant fees. According to him, retailers generally factor these processing costs into product prices. As a result, customers paying with debit cards or cash effectively pay the same price without receiving any of the rewards that credit card users enjoy.


He suggested that those who consistently pay their credit card bills in full can benefit from these reward programmes without paying interest.

The strategy works only if you pay in full

Despite favouring credit cards, Kaushik strongly cautioned against carrying unpaid balances. He warned that the entire strategy fails the moment a user misses full repayment by the due date. Indian credit card interest rates typically range between 30% and 48% annually, with most standard cards charging around 36% to 42%.

According to Kaushik, even a small unpaid balance can quickly erase years of accumulated reward points and significantly increase borrowing costs.

When should you use a debit card?

Kaushik believes debit cards still have an important role, but only in specific situations. He said they are most useful for withdrawing cash from ATMs or for people who need a strict spending limit to avoid overspending.

For most other day-to-day purchases, however, he considers debit cards a less effective financial tool.

Instead of treating credit cards as a source of debt, Kaushik encouraged users to view them as a cash flow optimisation tool. By automating full statement payments from a primary bank account and using credit responsibly for everyday purchases, he believes consumers can improve security, preserve liquidity and make their money work more efficiently.