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The pros and cons of paying credit card bills through third-party mobile apps

Stay alert to breach of financial data and when you redeem cashback offers while shopping from partnering merchants

April 10, 2021 / 07:55 PM IST

These days, we have mobile apps enticing users with reward points, cashback offers, etc. to pay their credit card bills using their platforms. But, should you trust these apps for storing your credit card details? Is it safe and secure to link our savings bank account to complete the payment transaction?

Let us understand this mode of paying credit card bills via apps.

What’s on offer?

CRED is an app that saves all credit card details when you register on the platform. You can pay credit card bills through net banking, Unified Payments Interface (UPI) and the auto pay feature on the app. It only allows consumers with credit scores higher than 750 to join the CRED community and make the payments. Suppose you don’t meet the minimum credit score criteria of CRED, you are put on wait list and given advice on how to improve your credit score.

When you make credit card bill payments using the app, you are rewarded with CRED coins. You earn one coin for each rupee paid off on the bills and can use these coins to collect various rewards made available on the platform. These rewards include discounts while shopping from partnered merchants promoting their goods and services on the app.

You can also redeem CRED coins for actual cash in ‘Kill the Bill’ section which is a cash back offer. The cash back is transferred automatically to the respective credit card, against which you have redeemed CRED coins. Typically, for redeeming 1000 CRED coins you will get a cashback of Rs 5 to Rs 10 on your credit card.

Paytm app offers up to 1000 Paytm First Points for making credit card bill payments of Rs 2,500 or more, using its platform. You can redeem the points for cashbacks and offers from partnering merchants. Credit card details can be saved for making bill payments through the app if required. You need to enter the payment details to complete the transaction.

On PhonePe, you don’t need to save credit card details like other apps while making the bill payment. You have to select the provider network (Visa, MasterCard, American Express, Diners, and Rupay), issuing bank, enter the card details and make the payment using UPI. The app extends rewards and cashback schemes based on your usage.

What works

CRED analyses your spending patterns, sends alerts on suspicious activities on the credit card, sounds you off early about charges or unexpected fees on credit card bills (annual maintenance fees, forex charges, etc.), due dates on WhatsApp, fetches credit card bill details and the dues to be paid. The app manages to pull all this information from your linked bank account and email ID, as you would have given consent to access those while registering.

Using Paytm and PhonePe, all consumers can make credit card payments. These apps do not have the minimum credit score criterion for accessing the credit card bill payment feature on the apps. On PhonePe, your credit card details are not saved while making a bill payment.

What doesn’t

There is a concern of data privacy on these payment apps as credit card details are saved and bank accounts are also linked. For instance, CRED seeks permission to access your email account to view your email messages for analysing your spending behaviour and credit card statements. Adarsh Thampy, Founder of RupeeTip says, “Data can get hacked. Nothing stops hackers from writing a malicious script to gain access to your email inbox that’s tied to your bank account.” Hackers can request a password reset, change the linked mobile number, and so on. They have complete read-only access to all your emails.

Ramalingam, Co-Founder and Director of says, “Users of payment apps have raised several complaints on social media about failed payments but amounts being debited from their bank accounts or delays in transferring sums to the card issuing bank.”

“If you have an account with a smaller bank to make your credit card bill payment, you might occasionally run into such issues,” says Thampy.

Suppose you save your credit card on the CRED app, but card bill payments have not been made through CRED, then it will continue to reflect as payment due on the platform. A spokesperson from CRED says, “We are working on the functionality for users to tag payments made outside of the CRED app, to create a more seamless experience.”

Moneycontrol’s take

If you are planning to use payment apps for making credit card bills, sign up after understanding the risks. You are giving away your financial data to a third party, access to your mobile phone messages and e-mails.

Stay conscious when you redeem cashback offers or ‘coins’ while shopping from partnering merchants. Do not overspend or shop for products that you are unlikely to use, just on a whim, for the sake of redeeming rewards / coins before the expiry date.

If the new-age apps aren’t rewarding enough and you feel insecure about data theft, then continue to repay credit card bills through traditional methods: net-banking, NEFT, auto-pay from your savings account, etc.
Hiral Thanawala is a personal finance journalist with 8 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
first published: Sep 29, 2020 09:42 am