August 24, 2025 · 12 mins read
Santosh Kumar
UPI is a payment platform that allows bank account holders to carry out low-value transactions up to Rs. 2 lakh. One can use UPI to transfer funds, make instant payments, or request money from any person. It is accessible through a smartphone or a feature phone.
The structure of a UPI address is just like your email ID and can be taken as your financial address. Similar to your bank account, this remains unique to every individual and will help you to transfer and receive funds instantly.
You do not need to transfer funds using old methods like NEFT, RTGS, and cheque. You can now send or receive money instantly throughout the day and even on holidays.
UPI payments and credit cards both come with diverse benefits. While UPI allows hassle-free, quick, and convenient options, credit cards come with rewards, discounts, and most importantly, access to immediate funds. Thereby, to offer you the best of both worlds, leading card issuers like HDFC Bank, Axis Bank, SBI Card, IDFC FIRST Bank, Bank of Baroda, etc, have initiated linking of credit cards to UPI.
The procedure will begin with RuPay credit cards. This move offers more convenience to the users as they can use their mobile phone to make a payment while availing the benefits of a credit card. Users can directly link their RuPay Credit Cards with the UPI app of their choice, such as Google Pay, PhonePe, Paytm, BHIM UPI, etc.
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(i) Hassle-free process: Linking your credit card to UPI is hassle-free, as it is just a one-time process. For making payments via this method, you do not need lengthy passwords or login details.
(ii) Secured Transactions: Credit-linked UPI payments are enhanced with double the security features of both UPI & credit cards. UPI payments are secured with factors like two-factor authentication, biometric verification, security PIN, etc. On the other hand, a card comes with fraud protection covers and a limited risk of unauthorized transactions. Thus, with the integrated transactions, you avail double the secured features.
(iii) Contactless payments have been an emerging credit card feature for a long time. However, UPI-linked credit card payments have added more to the contactless feature by dismissing the role of 'tap', 'touch', and punch buttons. Thus, your credit card payments are more contactless than they have ever been.
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While credit card companies determine your credit limit, it's a good idea to choose your spending cap within that limit. You can set your limit on a credit card, but it isn't necessarily a formal process. It's likely not a good idea, for example, to contact your lender and request a lower limit, as this may increase your credit utilization ratio. Instead, consider your budget and your financial habits. How much money could you pay each month? Are there any specific types of expenses that might push the limits of your budget? If you're not sure, then try tracking your spending for a month.
You might determine your spending limit in a few ways. Base it on your credit limit. If the credit card spending is below a set percentage of your credit limit, like 30%, you may be able to reduce the impact on your credit score. Set a weekly budget. A weekly credit card spending limit—whether that's Rs. 10 or Rs . 100—may be more manageable than a monthly limit for some people. Treat your credit card like a debit card. That means spending only what you have the cash to cover and quickly repaying your balances. You may also want to keep interest rates in mind as you determine your spending limit.
Many people don't have a credit card to make purchases now and pay once the statement is generated. A higher purchasing power at the grassroots level is also good for the running economy. Most people use UPI these days to carry out daily transactions. Credit Line on UPI has been launched to empower such users to carry out UPI transactions even when they don't have a balance in their bank account.
A credit line is a credit facility offered by banks and other financial institutions to individuals, businesses, and Governments. It enables these entities to use this credit facility to withdraw funds as per their business requirements.
Borrowers of a credit line can use any amount from the total sanctioned credit limit. It is a form of flexible loan in which the interest needs to be paid only on the utilised amount.
Credit Line on UPI is a pre-sanctioned credit limit that offers seamless UPI payment solutions for its customers. It is a pre-approved credit limit, which is directly linked to the borrower's UPI ID. It is another form of a secured digital payment solution offered by banks through UPI.
Borrowers can link credit lines to their funding accounts on UPI, like their savings, overdrafts, prepaid wallets, and credit cards. A credit line linked to the applicant's UPI acts as an alternative to credit cards.
There are two variants of Credit Lines on UPI, which leading private and public sector banks offer.
1: Secured Fixed deposit Credit Line on UPI
2: Unsecured variant Credit Lines on UPI
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1: Pre-approved Credit Limit: You can avail funds as much as you require from the total assigned limit and pay interest only on the utilized amount.
2: Details of Credit Line: With the help of the UPI app, you can get complete insights into your credit line status, utilized credit line, and existing EMIs.
3: Instant Access: You shall get instant access to credit and make seamless payments and transactions without paying any extra fees or charges.
4: Flexible Repayment Options: Borrowers can choose to repay the utilized credit amount in full or in installments, depending on their finances. AutoPay option is also available.
5: Secure Authentication: You can authenticate transactions with a dedicated UPI PIN for Credit Line on UPI.
6: Unified Linking: You can explore credit line accounts from the issuer bank based on your registered mobile number and link them to any UPI app.
7: Transaction Limits: Minimum Limit – Rs. 25,000
8: Maximum Limit – Rs. 5 Lakh
9: Variety in Transactions: Borrowers can make payments only to merchants with QR Codes and e-commerce merchants using Credit lines on UPI.
10: Dispute Resolution: One can resolve disputes conveniently via the ODR (UPI Help) available on UPI apps.
The eligibility for a UPI Credit Line depends on the type of credit line offered, and shall vary from lender to lender:
1: Age: Minimum 18 years at the time of loan application
2: The credit line is issued by the bank where the applicant is already operating a bank account and where UPI is activated
3: An Indian citizen with no previous default with any financial institution
4: No past criminal record of the applicant
After applying for a credit line, the bank shall evaluate your creditworthiness based on your credit report.
Note: Borrowers can access their UPI credit line through the same app they use to make payments and transfers.
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UPI credit line functions similarly to the credit line offered as a credit product by financial institutions.
At first, you have to apply for the UPI credit line through a UPI app.
The bank whose account you are operating for UPI transfer would request your credit report from a bureau, probably CIBIL.
The bank may approve or reject your UPI Credit Line request based on your credit report.
If approved, the bank will assign you a credit line of a specific amount that can be used for UPI transactions.
Every month, a statement would be generated that would contain the transactions, the amount due, and the due date.
Once you make the repayment, your overall credit limit is restored and can be used to make the payment the next time.
You have to select the UPI Credit Line as the payment method at the time of making the payment for the UPI Credit Line.
1: The credit line can be used only for the merchant UPI ID payments and not for payments to any Peer-to-Peer (P2P) UPI transactions
2: There are a few discounts and offers on UPI Credit Line as opposed to credit cards that can offer up to 5% instant discounts on purchases.
3: Currently, not all banks provide a credit line on UPI. Also, many UPI apps still have not started providing this facility on their platforms.
4: There are daily and per-transaction limits on the Credit Line on UPI. In the case of credit cards, a user has the option to set the transaction limits based on the available credit limit.
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1: Make sure that your respective lending bank supports the credit line feature on UPI.
2: While activating the credit line on UPI, ensure to turn on outgoing SMS services.
3: Use the same mobile numbers while using single or multiple UPIs by activating a credit line.
4: If using a prepaid recharge pack that does not have Outgoing SMS service, then contact your operator.
5: The debit card shall be associated with the credit line
6: Check with your bank if the pre-approved credit line is supported or not
7: Your credit line approval can be revoked without any notice by the provider if there is regular non-payment of dues
Both options, a credit line on UPI and a RuPay credit card for UPI transactions, have been launched to expand the purview of UPI. They enable users to make UPI transactions even if they don't have funds in their bank account. However, both options have some advantages over the other. Let us understand some of those:
Some RuPay credit cards provide cashback or reward points on making UPI transactions, which is not the case for the UPI Credit Line.
Your UPI Credit Line is a virtual product, and you don't have to carry a physical credit card to make transactions using this service.
The approval for a Credit Line on UPI is relatively easier than that of a credit card. It is quick, and a user can start using the service almost instantly.
Linking your credit card to UPI apps is a smart move in today's times. It lets you easily pay for things online or in stores with just your phone. You get a safe way to shop and extra perks like cash back. There is an everyday spending limit, but it's usually more than enough for regular use. To get these benefits, link your RuPay credit card to a UPI app like Google Pay or PhonePe. This makes shopping and managing money easy and helps you make the most of your RuPay card with extra security and rewards.
Also Read: Contactless Credit Cards – Are They Safe?
Ans. Yes, you are authorized to remove the credit line on your desired UPI app after using it or making payments and transactions.
Ans. Sanctioning of credit lines depends on your creditworthiness and repayment history. It shall solely depend on the respective bank to offer you a credit line or not if you do not have a CIBIL score.
Ans. Yes, you can use the pre-approved credit line sanctioned by the bank on multiple UPI apps like Google Pay, Paytm, PayZapp, PhonePe, etc.
Ans. As long as you are paying all your dues on time, the UPI credit line shall not lower your credit score. However, it may take a small dip when you apply for a credit line, as it is considered a hard inquiry by the credit bureaus.
Ans. The credit limit offered by the bank for credit lines on UPI shall depend on your creditworthiness, income, payment history, credit behaviour, and various other factors. The credit line offered by banks shall differ from applicant to applicant.
Ans. The maximum Credit Line on UPI daily transfer limit shall vary from bank to bank between Rs. 25,000 and Rs. 1 lakh.
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