Linking Credit Cards with UPI

How can Credit Cards be linked with UPI?

Credit Cards are no stranger to getting new features. From the days of their inception, Credit cards have evolved a long way. Now credit cards can be linked as a payment method in UPI applications like Phonepe, Gpay etc. This feature is advantageous both for the merchants as well as the users. In this article, we can see how beneficial linking credit cards with UPI can be

Benefits of Credit Card linking with UPI

• Easy to Use

Adding a credit card with the UPI saves a lot of time for merchants and users, as there is no need to manually enter the details except for CVV. By linking with UPI, you need not physically carry your card everywhere. You can use them easily without any hassles and there are no extra charges for using your credit card with a UPI platform

• Rewards and Offers

It is well known that you can earn reward points by using your credit card. Since UPI payments are used so often these days, by linking your credit card, you can make optimum usage of it and earn more reward points. Moreover, the UPI platform also provides you with periodic offers. So, your opportunity to get rewards is doubled

• Security

UPI transactions are safe and secure and all the UPI applications are encrypted. The transaction is complete only when the OTP is entered, so, you need not worry about the security of your credit cards. Even from a merchant pov, certain troubles like payment failure in PoS terminals could be avoided

• Easy Purchases

For UPIs linked with your savings account, you can only use them to your available balance in the accounts. You may have to postpone your purchase if you do not have sufficient fund in your balance. But if you had linked your credit card with a UPI application, then you can make your purchases instantly. Linking with UPI enables easy credit 

• PoS terminal purchase

Many businesses have to either purchase or rent PoS terminals in order to accept card payments. However, with credit card usage being possible with UPI, it eliminates the need for businesses to purchase PoS terminal machines and accept payments seamlessly

• Reduces Settlement time

Normally, transactions through credit card take 1 or 2 days to reflect. Because of this delay, businesses have a hard time in keeping up the cash flow and during weekends and long holidays, it causes even more delay. By accepting Credit Cards through UPI, businesses receive their funds instantly whenever one performs a transaction through it and a healthier cashflow is maintained. Simply put, this feature helps business thrive and move to the next level.

How to Link Your RuPay Credit Card to UPI?

• Check Eligibility – Ensure your bank offers UPI linking for RuPay credit cards.
• Download a UPI App – Choose a UPI-enabled app like BHIM, PhonePe, Paytm, etc.
• Link Your Credit Card – Go to the “Add Payment Method” section in the app and choose “Credit Card.” Enter your credit card details and verify using OTP.
• Set a UPI PIN – Create a unique UPI PIN for secure transactions.

How can I use my Credit cards through UPI?

• Open the UPI Application
• Scan the QR Code of the merchant or enter his mobile number
• Choose the preference for mode of payment via UPI
• Select the preferred credit card
• Complete the transaction with UPI PIN and OTP

What are the credit cards that can be used in UPI?

At present, all VISA, Master, and Rupay cards offered by the below-mentioned banks can be used in UPI

• SBI
• ICICI
• HDFC
• Axis Bank
• Federal Bank
• Punjab National Bank
• HSBC Bank

Things to Consider Before Linking

• Limited to RuPay Cards: Currently, only RuPay credit cards can be linked to UPI platforms. Visa and Mastercard credit cards are not yet supported.
• Transaction Limits: UPI payments have daily and monthly transaction limits that may be lower than your credit card spending limit.
• Interest Charges: Unlike debit cards, credit card transactions accrue interest if not paid in full by the due date. This can lead to significant debt accumulation if not managed carefully.
• No Cashback/Rewards on Utilities & Bill Payments: Some banks don’t offer cashback or reward points on transactions categorized as bill payments or utilities (electricity, water, etc.) through UPI.
• Risk of Overspending: The ease of using UPI with a credit card can lead to impulsive spending and exceeding your credit limit. This can negatively impact your credit score and financial health.

Responsible Use of UPI-Linked Credit Cards

• Budget and Track Spending: Set a realistic budget for your credit card spending through UPI and track your expenses regularly.
• Pay in Full: Always strive to pay your credit card bill in full by the due date to avoid interest charges.
• Avoid Impulsive Purchases: Be mindful of your spending and avoid unnecessary purchases using UPI with your credit card.
• Monitor Transactions: Regularly monitor your credit card statements for fraudulent activity.

 Summary

While linking a RuPay credit card to UPI offers convenience and potential benefits like rewards, it’s crucial to be aware of the limitations and potential risks. Responsible use of this feature requires careful budgeting, discipline, and timely bill payments.

Remember, UPI-linked credit cards are meant for planned and controlled spending, not as a substitute for debit cards or a source of easy credit. If you’re prone to overspending or struggle with managing credit card debt, consider sticking to traditional methods like debit cards or cash for your UPI transactions.