Earn rewards on every UPI payment with your credit card—here’s how

Receiving rewards is only half the struggle—you also need to master reward redemptions.

Using UPI just got more rewarding—literally. With the integration of RuPay credit cards into the UPI ecosystem, salaried professionals and everyday users can now enjoy the convenience of instant mobile payments while earning cashback, points, and other benefits. But to truly take advantage of this feature, it’s important to understand how it works, where to use it, and what to watch out for.

Link your credit card with UPI apps

To earn rewards with every UPI transaction, you need to first link your RuPay credit card with UPI apps like PhonePe, Google Pay, or Paytm. Currently, only RuPay credit cards are accepted as per the National Payments Corporation of India. Once linked, you can use this credit card just like a bank account in UPI. Now you can easily scan QR codes and make payments, and feel the convenience of mobile payments with the benefit of reward accumulation.

Use credit card for merchant transactions only

It is important to note that you can only UPI credit card payments only for merchant transactions and not for peer-to-peer transactions. This means that you can use your linked credit card—the RuPay credit card in this case—to pay shopkeepers, service providers, restaurants, or e-commerce merchants, but not for sending money to friends or relatives. Its misuse for restricted transactions can lead to fines or blocking of the credit card on UPI platforms.

Choose the right credit card for rewards

All RuPay credit cards do not reward equally on UPI. While some give cashback, others give reward points or offer discounts on certain categories such as dining or grocery. It's best to opt

for a card that aligns with your spending pattern. HDFC, SBI, and ICICI, for instance, provide RuPay versions of widely used cards—compare the two to see which one provides the highest value in terms of usage on UPI.

Monitor your reward and repayment cycle

While UPI simplifies spending, remember that you're still spending on credit. Keep an eye on your UPI-linked credit card spends and settle your credit card bills on time to avoid interest. All reward programmes come with a limit or validity period, so track them through your credit card app or website. Responsible usage will not only ensure a high credit score, it also sees you derive maximum rewards.

Be aware of hidden charges or unstated exclusions

While UPI transactions via RuPay credit cards are typically free, always check your card terms. Some issuers may not have UPI transactions eligible for promotional cashback rewards or charge reduced reward rates. Your credit limits can also get exhausted earlier if you're aggressively using the card on UPI. Stay within safe spending limits and do not spend credit on small, routine expenses unless you're on specific reward thresholds.

Use your rewards smartly

Receiving rewards is only half the struggle—you also need to master reward redemptions. Most credit cards offer many choices like cashback, gift vouchers, merchandise, or booking a trip. Some even allow you to exchange points as air miles. Be sure to examine the redemption value; some websites may offer better value than others. Maximize high-value redemptions and avoid using points for low-value items like small gift cards.