The Unified Payments Interface (UPI) has become India’s most widely used digital payment method, enabling instant money transfers using just a mobile number or QR code. Previously, UPI payments were linked solely to current or savings accounts. But Reserve Bank of India (RBI) has now allowed credit cards to be linked to UPI, starting with the RuPay network. The link has a lot to give the customer in the way of convenience by providing the option of credit with the ease of UPI. Smooth convenience with more spending power
By linking a credit card to UPI, customers can pay retailers, online merchants, and local stores through their UPI app—the same manner as using a debit card or bank account. This means no need to physically carry the credit card or even swipe it. Instead, buyers can use the credit limit through just scanning a QR code or entering a phone number on services such as PhonePe, Paytm, Google Pay, or BHIM.
This comes to one's aid in day-to-day activities—like making retail payments, hiring taxis, or dining out—where credit card machines may not be available on hand but UPI is a ubiquitous medium accepted everywhere.
Open credit card reward for daily use
All credit cards already offer cashback, reward points, or travel miles on purchases. But they were normally only available for use online or for POS (Point-of-Sale) transactions. With the UPI integration, customers are now able to earn the same rewards on small-ticket daily expenses like auto fares, street food, or utility bills—categories not available so far for bank account payments using UPI.
This allows for rapid earning of rewards, which may lower the total expense of your monthly bills in case of early repayment against the due date.
Increased liquidity and financing flexibility
One of the major advantages of credit card use is the interest-free period of credit, typically spanning 20 to 50 days. With added application to UPI payments, this benefit further extends to payments otherwise deducted directly from a bank account. Such facilitation can enhance cash flow and give consumers greater leeway to stretch budgets—especially when times are tight in months.
Better monitoring and control of budgets
Having all UPI payments made using my credit card can consolidate all my spends into one statement, and it becomes easy to see where your money goes. This is especially useful for professionals and salaried individuals who want to have a clear idea of their spending habits every month.
Use with caution
Even with the benefit, caution needs to be exercised. Since the funds are not being charged directly from your account, spending can become easy to ignore and have a balance that will
incur heavy interest charges if not settled in time. Also, so far, UPI linking has only been permitted on RuPay cards, and merchants might or might not accept payments on the basis of a credit card's UPI due to the MDR (merchant discount rate).
The move to link credit cards with UPI is a significant turning point in India's digital payments journey. It is a more intelligent payment system for prudent users—combining rewards, ease of use, and credit. But to really benefit from it, discipline is required, so is tracking of spending, and regular repayments.
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