Make UPI Payments Using Credit Cards

A decade ago, many of us didn't even have bank accounts, let alone debit cards. The adoption of digital banking in India has been nothing short of revolutionary, with a significant increase in the number of debit card users. Today, we are witnessing an even greater transformation: the widespread adoption of credit cards.
One of our users recently shared a fascinating experience that perfectly illustrates this shift. They were enjoying a plate of pani puris from a street vendor and, to everyone's surprise, made the payment using a credit card via the UPI feature. Crazy, right? 😲
This blog will guide you through the process of making UPI payments using your credit card, as well as the advantages and best credit cards for the same, ensuring you can seamlessly enjoy the convenience of digital transactions in your everyday life.

Coverings-

• How does UPI credit work for you?
• Benefits of linking your credit card with UPI
• How to make payments using credit on UPI
• Which Bank Credit Cards are Functional with UPI?
• Best UPI Credit Cards - Rupay Credit Cards in India

How does UPI credit work for you?

UPI credit actually works in two ways in India:

1. RuPay Credit Card on UPI: This involves linking your RuPay credit card to a UPI app like PhonePe or Google Pay. Not all banks offer this feature yet, but it allows you to make payments using your credit limit, just like a debit card. You get the convenience of digital payments with the benefit of earning reward points on your credit card purchases. However, currently, this only works for merchant payments (scanning QR codes or online shopping) and not for things like peer-to-peer transfers or bill payments.
2. Pre-sanctioned Credit Line on UPI: This is a newer feature that allows banks to offer small credit lines directly through UPI apps. This is similar to having a credit card on UPI, but instead of using an existing credit card, you get a separate line of credit specifically for UPI transactions. This can be a good option for people who don't have a credit card or who want a smaller credit limit for everyday purchases.

For those who prefer connecting UPI with their credit cards, here are the benefits- 

Benefits of linking your credit card with UPI

1. Increased Convenience:
a. Wider Applicability: You can use your credit card for everyday purchases accepted by UPI, expanding its reach beyond traditional POS terminals. This includes online payments, bill payments, and even small purchases at street vendors.
b. Seamless Integration: This makes credit card payments as easy as scanning a QR code or entering a virtual address within your preferred UPI app.

2. Earning Rewards: 
a. Reward Points on every transaction: Unlike debit cards, credit cards typically offer reward points, cashback, or miles on purchases. Linking your card to UPI lets you earn these benefits on even smaller transactions.
b. Boosted Rewards Potential: By using your credit card more frequently through UPI, you can potentially rack up significant rewards over time.

3. Emergency Buffer: Having a linked credit card on UPI can be a lifesaver in emergencies. For unexpected expenses like car repairs or medical bills, you can leverage your credit limit to handle the situation without dipping into your savings.

4. Building Credit History: Regularly using and responsibly paying off your UPI credit purchases can help build a positive credit history. This is beneficial if you ever need to apply for a loan or other forms of credit in the future.

Remember:

These benefits come with some responsibility:

1. Debt Potential: Due to easy access to credit through UPI, it's crucial to practice responsible credit management to avoid accumulating debt.
2. Interest Charges: Credit card purchases accrue interest if not paid in full by the due date. Manage your credit usage to avoid high interest charges.

Overall, linking your credit card with UPI can enhance your payment experience by offering convenience, rewards, and potentially higher spending power. Just be sure to use it responsibly to reap the benefits without the drawbacks.

How to make payments using credit on UPI?

To make UPI payments using your credit card, follow these steps:

1. Select UPI as the payment method: Choose UPI when prompted for a payment option.
2. Link your credit card to your UPI account: In the UPI payment interface, find the option to add a new payment method.
3. Details Needed: Enter your credit card information, including the card number, expiration date, and CVV.
4. Authenticate your card: Some systems might require a one-time authentication, possibly through an OTP sent to your registered mobile number or email.
5. Transaction authentication: Once your card is linked, you'll need to enter your UPI PIN for each transaction. This PIN is different from your credit card PIN and is set up when you first configure your UPI account.
6. Confirmation of transaction: After entering the UPI PIN and authorising the transaction, the payment will be processed.

➡ Interest rates and tenure: UPI credit typically doesn't involve tenure options or traditional interest rates, as it is designed for instant money transfers. However, credit card issuers may offer lending credit cards linked to UPI with varying terms, so it's important to review these conditions carefully.

Which Bank Credit Cards are Functional with UPI?

Currently, only RuPay credit cards can be linked to UPI to make payments. Here are some banks that offer RuPay credit cards that are functional with UPI:

1. Punjab National Bank
2. Union Bank of India 
3. Indian Bank
4. HDFC Bank
5. Axis Bank
6. Kotak Mahindra
7. Canara Bank
8. SBI Cards
9. Yes Bank 
10. BOB Financial Solutions Limited

It's important to note that you'll need to use a UPI app that supports RuPay credit cards. Many popular UPI apps, such as BHIM, PhonePe, Paytm, and Google Pay (GPay), now allow linking to RuPay credit cards.

Best UPI Credit Cards - Rupay Credit Cards in India

Conclusion

In conclusion, it is interesting to note how UPI quickly became a convenient habit for people in India. Mastering the art of making UPI payments in India not only simplifies your financial transactions but also aligns you with a rapidly evolving digital economy.

The use of debit cards has been significantly revolutionised by the UPI wave in India, so much so that you don't need to carry your debit card if you have UPI on your phone. With its seamless and secure platform, UPI has transformed the way we handle money, making everyday transactions quicker, safer, and more efficient. Whether you are paying for your morning coffee, shopping online, or splitting a bill with friends, UPI offers unparalleled ease and convenience. Embrace this digital shift and experience the future of payments today.