November 14, 2024 · 11 mins read
Santosh Kumar
Whether to meet your everyday needs or to enjoy the luxuries of life, you need money and carrying physical cash comes with the risk of being lost or stolen. Gone are those days when you had to carry money while going shopping, to hospitals and even on vacation trips. The trend changed from cash to card, be it debit card or credit card. Credit cards have become more prevalent as they offer you various benefits like convenience and rewards along with the opportunity to make purchases and meet financial emergencies even if you are low on cash. But the world is changing every day and new technologies are emerging every minute. In this fast-paced world, people don't even prefer to carry cards; hence, Unified Payments Interface (UPI) has become the most preferred payment option. These days starting from street vendors to international star hotels, everyone likes to accept payment through UPI.
UPI payments have many advantages, such as convenience, security, and much more. Credit cards have many merits like cashless payment even if you don't have sufficient funds, credit score building and rewards. While both have their own merits, the days have come to enjoy the best of the worlds together. Yes, you can now use credit card for UPI payments. Read ahead to understand how to use a credit card for UPI payment.
Though UPI transactions come with a plethora of benefits, the current scenario is that only RuPay credit cards allow UPI integration. With a RuPay credit card, you can make payments to merchants(P2M) via UPI. However, you cannot use this feature to send money to other people or other credit cards.
The first step to start using your credit card via UPI is to link your credit card to your UPI. It is a very simple process and similar to the way you link your bank account to your UPI.
1. Open Your UPI App
2. Go to 'Add Payment Method', which is found in the 'Bank Accounts' or 'Payment Methods' section.
3. Select ‘Add Credit Card’. This will be visible only if the app supports credit card linking.
4. Enter the credit card details like credit card number, expiry date, and CVV.
5. You can authenticate your card via the OTP sent to your registered mobile number.
6. Once verified, you can set a UPI PIN for your credit card.
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That’s it. Now, you can start making payments.
While you are opting for UPI payment at any payment, check out, if you wish to use your credit card, then,
1. Enter the UPI ID that is linked to your credit card.
2. Approve the transaction by entering your UPI PIN.
Let's get a deeper look into the limitations of using credit cards for UPI payments.
You can enjoy a limitless number of transactions while using a credit card for UPI, and that is happy news for shopping freaks. That makes this option a great choice for paying for everyday purchases right from paying for your tea-time snack to purchasing your favourite outfit. Note that you have got limitless transactions and that doesn't mean that you can go beyond your amount limit. So, ensure you have sufficient credit limits to make the payment.
Certainly, for anything and everything, there should be a limit regarding the amount, right? Yes, credit card UPI payments also have such amount limits. Firstly, UPI has a 1 lakh amount limit per card per day. However, this limit is 2 lakh for some cards with special MCC codes(5960, 6300, and 6529). Secondly, you cannot spend more than your credit limit. So, even if you have to make a credit card UPI payment for just 50,000, if you have only a 10,000 credit limit left on your credit card, then you cannot make the payment. That is, you can make payments up to your credit limit or UPI limit, whichever is lower.
Special attention, dear newbies. For the first time if you have linked your credit card to UPI, you can make only 5000 rupees transactions for the first 24 hours. After that, you are free to enjoy the broader amount limit.
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The benefits of using a credit card for UPI payments are many and that is why it has become popular in society. Here are a few.
Credit card usage has become easier for smaller transactions and for paying small and street vendors who do not have a Point-of-Sale (POS) terminal. Even now small shops and street vendors don't accept credit card transactions but have adopted UPI for receiving the payments. By linking your credit card to your UPI account, you can make payments through your credit card for even single-digit amounts.
Carrying cards also has the risk of getting lost or stolen. Now, you can stay worry-free and forget about forgetting to take your credit card while going out. Nowadays, carrying our phones wherever we go has become a habit, and hence, your payment option will always be there with you wherever you go.
UPI is the most opted payment method in the recent years as you need not reveal any card details while paying. It has other benefits like secured, card-less and cashless transactions. By linking your credit card to your UPI account, you can add up the benefits of your credit card facility like rewards, cashback offers and much more. Also, with the use of credit cards for UPI, you can borrow money from your credit card lender for bulk purchases and during financial emergencies.
Usually, debit cards come with a lesser spending limit, and hence, with debit card UPI, you can spend only to that limit. However, credit cards have a higher credit limit.
Now, you can make even small transactions using your credit card. You can make it a habit to use your credit account for all daily expenses to build up your credit score. Especially for newbies who own a credit card but don't have bigger expenses, paying for daily needs via credit card and promptly paying back the bills will help build credit scores. Note that if you fail to pay the bill or make partial payments that will drastically pull down your credit score.
Most credit card lenders offer EMI facilities for large purchases. By linking your credit card to your UPI, you can make large purchases within your credit limit and later convert them into EMI. Thus, you can split your financial burden over a period of a few months.
UPI is widely accepted across various platforms, from online shopping sites to utility bills. By integrating your credit card into UPI, you can easily pay a diverse range of bills via your credit card.
UPI paves the way for you to link multiple credit accounts to your UPI. Thus, you can have all your credit accounts under one roof, and you have the power to make payments from any of these credit accounts. This will help you maintain a good credit utilisation ratio.
With UPI, you are free to integrate debit and credit accounts, allowing you to choose the best for the situation when you want to make any payment. You can opt to choose to pay with a credit card only when you don't have sufficient balance in your debit account.
With multiple accounts linked, you are free to choose other accounts in case a payment fails.
As you need not provide your bank details or credit card details during the payment process, using your credit card via UPI is a safer choice to avoid sharing sensitive information on online sites.
With UPI, the expenses that you spend from various debit and credit cards will come under one roof. And the best part is that UPI provides the facility to track and manage your expenses. With the option to monitor your spending pattern, now you can make wise budget plans. You can also set spending limits so that you avoid the chance of overspending.
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With UPI transactions, it is easy and convenient to make payments. Ease of payments will trigger you to make impulsive purchases and lead to financial debts. So make sure to keep track of the spending history, set spending limits and establish a safe budget. More importantly, stick to your budget and avoid overspending.
A well-known step to improve a credit score is to promptly use credit wisely and the bills. With a credit card for UPI payments, you can make use of your credit account even for daily needs. By paying the credit bills on time, you can improve your credit score, which will keep you ready to seamlessly avail of any credit product in the future.
As your credit card is linked to your UPI account, anyone can easily make transactions via your mobile if your PIN is known. So, set a complex PIN or password that is difficult for others to guess yet easy for you to remember. Avoid birthdays and partial phone numbers as your PIN. Also, make sure you use a unique password or PIN. To top it all, keep it confidential.
Exercise precaution if you receive any SMS or email with suspicious links. To make unauthorised transactions, fraudsters can send links with fake messages to motivate you to click on the link or can ask for a refund of an excess amount that they have paid you or may pose as bank officials to tap sensitive information from you. To be safe, make it a practice to verify the authenticity of payment requests before making any payments and never respond to unexpected payment requests. Also, don't make payments upon phone calls that create urgency. To top it all, avoid using public Wi-Fi for making UPI transactions.
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We are in an era where technology changes every minute, especially in the field of finance and digital transactions. As technology emerges, our convenience level improves, and simultaneously, new issues are popping up. The Credit Card UPI transaction is one such advancement in the digital payment system and has become popular as it is inclusive of the merits of both UPI payments and credit cards. Understand how to use credit cards for UPI, its merits and demerits and make wise use of this technology to make a lifestyle upgrade.
Can I use credit card for UPI?
Yes you can. But currently only RuPay cards can be linked to your UPI account.
Should I opt for a credit card or debit card for UPI payment?
Whether to choose a debit or credit card depends on your situation. If you want to build your credit score, your debit balance is low or if you have exciting rewards or discounts while paying with your credit card, then you can choose to pay with your credit card. Otherwise, a debit card for UPI payment is a good option.
Do I have any fees for linking my credit card to UPI?
There are no fees for the customers. However merchants will have a small interchange fee in the range of 0.5% to 1.1% for receiving payments above 200 rupees.
I just linked my RuPay credit card to UPI, which has a credit limit of more than my payment amount. But I am unable to make the payment. Why is that?
For the first 24 hours after linking your credit card, you are eligible to make a maximum transaction of 5000 rupees. So, if your payment amount is more than 5000, you cannot make the payment.
Why does my UPI payment to my friend via credit card fail?
You can make credit card UPI payments to merchants and not to individuals or to another credit card.
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