CATEGORY - UPI

UPI credit cards: Understanding, applying, and acquiring

UPI - 4 Dec 2023

Table of Contents

UPI credit cards: A new era of digital payments

Unified Payments Interface (UPI) is an instant real-time payment system developed by the National Payments Corporation of India (NPCI). It facilitates inter-bank peer-to-peer and e-commerce transactions using a virtual payment address (VPA) linked to a bank account. UPI has transformed digital payments in India since its launch in 2016, and now, it is poised to revolutionize the credit card payment ecosystem with the introduction of UPI Credit Cards.

UPI Credit Cards allow users to link their credit cards to their UPI IDs, enabling them to make payments using UPI QR codes. This means that users can now use their credit cards to make payments at any merchant that accepts UPI without having to swipe their cards or enter their card details.

Here are some examples of how UPI credit cards can be used:

Making payments at grocery stores, restaurants, and other retail outlets: Scan the UPI QR code at the merchant’s checkout counter and enter your UPI PIN to make a payment.
Paying for online purchases: Many e-commerce websites now offer UPI as a payment option. When you select UPI as your payment method, you will be redirected to your UPI app to complete the payment.
Sending money to friends and family: You can use UPI Credit Cards to send money to anyone who has a UPI ID, even if they don’t have a credit card.

How to use UPI credit card

To use a UPI credit card, you first need to link your credit card to your UPI app. Here are the steps on how to do it:

Open your UPI app and go to the “Link Credit Card” or “Add Credit Card” option.
Select your credit card issuer from the list.
Enter your credit card number, expiry date, and CVV.
Set a UPI PIN for your credit card.
Confirm the linkage.

Once your credit card is linked to your UPI app, you can start making UPI payments using your credit card. Here are the steps on how to do it:

Open your UPI app and go to the “Send Money” option.
Enter the beneficiary’s UPI ID or bank account details.
Enter the amount you want to transfer.
Select “Credit Card” as the payment mode.
Enter your UPI PIN to confirm the payment.

Benefits of UPI credit card

UPI credit card offers a number of benefits to both customers and merchants. Here are some of the key benefits:

For customers:

Convenience: UPI credit card payments are instant and convenient. You can make payments without having to carry your physical credit card or swipe it through a POS machine.
Rewards: You can continue to earn rewards points on your credit card transactions, even when you make payments using UPI. This is a great way to maximize your rewards and savings.
Creditworthiness: Using a UPI credit card regularly and paying your bills on time can help you build your credit history. This can make it easier to qualify for loans and other forms of credit in the future.
Security: UPI credit card payments are secure and protected by two-factor authentication. This means that only you can make payments using your UPI credit card.

For merchants:

Increased sales: UPI credit card payments can help merchants increase their sales by making it easier for customers to pay for their purchases.
Reduced costs: UPI credit card payments are cost-effective for merchants. There are no transaction fees associated with UPI payments.
Improved customer experience: UPI credit card payments provide a seamless and convenient payment experience for customers. This can help merchants improve customer satisfaction and loyalty.

Overall, UPI credit card is a win-win for both customers and merchants. It offers a number of benefits, including convenience, rewards, security, and cost-effectiveness.

Here are some additional benefits of a UPI credit card:

Wide acceptance: UPI is accepted by millions of merchants across India. This means that you can use your UPI credit card to make payments at almost any merchant that accepts UPI.
No fuel surcharge: UPI payments are not subject to fuel surcharge. This means that you can save money on fuel purchases by using your UPI credit card.
Exclusive offers: Some banks offer exclusive offers and discounts to customers who use UPI credit cards.

Points to consider when using a UPI credit card

Here are some points to consider when using a UPI credit card:

Interest : UPI credit card transactions are treated like regular credit card transactions. This means that you will be charged interest on your purchases if you do not pay your bill in full by the due date.
Fees : Some banks may charge a fee for linking your credit card to UPI or for making UPI credit card payments. It is important to check with your bank to see if there are any fees associated with UPI credit card linkage and usage.
Limits : There may be limits on the amount of money you can spend using a UPI credit card in a day or a month. It is important to check with your bank to understand the limits on your UPI credit card.
Reward points : While you can continue to earn reward points on your credit card transactions when you make payments using UPI, some banks may cap the number of reward points you can earn on UPI transactions or exclude certain types of transactions from earning rewards. It is important to check with your bank to understand their reward program policies for UPI transactions.
Merchant acceptance : While merchants across India widely accept UPI, it is important to note that not all merchants accept UPI credit card payments. It is always best to check with the merchant before making a payment to see if they accept UPI credit cards.

Overall, UPI credit cards are a convenient and rewarding way to make payments. However, it is important to be aware of the interest, fees, limits, rewards, and merchant acceptance before using a UPI credit card.

Here are some additional tips for using a UPI credit card safely and responsibly:

Only link your credit card to a trusted and secure UPI app.
Keep your UPI PIN confidential, and do not share it with anyone.
Review your UPI statements regularly to ensure that all transactions are accurate.
If you notice any unauthorized transactions, report them to your bank immediately.
Use your UPI credit card responsibly and only spend what you can afford to repay on time.

By following these tips, you can enjoy the benefits of UPI credit cards while minimizing the risks.

UPI credit card vs. Regular credit card

Feature	UPI credit card	Regular credit card
Linked to UPI app	Yes	No
Payment mode	UPI	Swipe
Instant payment	Yes	No
Rewards points	Yes	Yes/No (depending on the merchant)
Merchant acceptance	Wide	Wide, but not all merchants accept credit cards

Which one is better?

UPI credit card and regular credit card both have their own advantages and disadvantages. The best one for you will depend on your individual needs and preferences.

If you are looking for a convenient and rewarding way to make payments, then the UPI credit card is a good option. However, if you need a credit card that all merchants accept, then a regular credit card is a better choice.

Best UPI Credit Cards in India

Here are some of the best UPI credit cards in India:

HDFC bank UPI Rupay credit card

The HDFC Bank UPI RuPay Credit Card is a virtual credit card that allows you to make UPI payments. It offers a number of benefits, including:

Convenience: You can make UPI payments without having to carry your physical credit card or swipe it through a POS machine.
Rewards: You can earn reward points on all your UPI transactions, which you can redeem for travel, cash, and other rewards.
No fuel surcharge: You are not charged a fuel surcharge when you use your UPI credit card to make fuel purchases.
Exclusive offers: HDFC Bank offers exclusive offers and discounts to customers who use UPI credit cards.

Axis bank RuPay platinum credit card

The Axis Bank RuPay Platinum Credit Card is a premium credit card that offers a number of benefits, including:

Welcome bonus: You can earn a welcome bonus of 5% cashback up to ₹1,000 on your first ₹10,000 spent within 90 days of card activation.
Rewards: You can earn 1% cashback on all your spending, with no capping.
Fuel surcharge waiver: You get a 1% fuel surcharge waiver on all your fuel purchases.
Airport lounge access: You get complimentary access to domestic airport lounges.

Tata Neu plus HDFC bank credit card

The Tata Neu Plus HDFC Bank Credit Card is a co-branded credit card that offers a number of benefits, including:

Rewards: You can earn 5% cash back on all your spending on the Tata Neu app and 1% cash back on all your other spending.
Welcome bonus: You can earn a welcome bonus of 10,000 NeuCoins, which can be redeemed for discounts and offers on the Tata Neu app.
Free shipping: You get free shipping on all your orders from the Tata Neu app.

ICICI bank coral RuPay credit card

The ICICI Bank Coral RuPay Credit Card is a mid-range credit card that offers a number of benefits, including:

Rewards: You can earn 1% cashback on all your spending.
Fuel surcharge waiver: You get a 1% fuel surcharge waiver on all your fuel purchases.
Welcome bonus: You can earn a welcome bonus of 4,000 PAYBACK points, which can be redeemed for travel, cash, and other rewards.

IRCTC RuPay SBI card

The IRCTC RuPay SBI Card is a co-branded credit card that offers a number of benefits to railway passengers, including:

Rail ticket discounts: You get a 5% discount on all your IRCTC rail ticket bookings.
Welcome bonus: You can earn a welcome bonus of 2,000 PAYBACK points, which can be redeemed for travel, cash, and other rewards.
Travel insurance: You get complimentary travel insurance on all your rail and air travel bookings.

When choosing a UPI credit card, it is important to consider your individual needs and preferences. Factors to consider include the rewards program, fees, and merchant acceptance. It is also important to read the terms and conditions carefully before applying for a UPI credit card.

How to link your credit card to UPI

To link your credit card to UPI, you need to follow these steps:

Open your UPI app and go to the “Link Credit Card” or “Add Credit Card” option.
Select your credit card issuer from the list.
Enter your credit card number, expiry date, and CVV.
Set a UPI PIN for your credit card.
Confirm the linkage.

The steps may vary slightly depending on the UPI app you are using.

Once your credit card is linked to your UPI app, you can start making UPI payments using your credit card. To make a UPI payment using your credit card, follow these steps:

Open your UPI app and go to the “Send Money” option.
Enter the beneficiary’s UPI ID or bank account details.
Enter the amount you want to transfer.
Select “Credit Card” as the payment mode.
Enter your UPI PIN to confirm the payment.

Things to keep in mind:

Some banks may charge a fee for linking your credit card to UPI or for making UPI credit card payments. It is important to check with your bank to see if there are any fees associated with UPI credit card linkage and usage.
There may be limits on the amount of money you can spend using a UPI credit card in a day or a month. It is important to check with your bank to understand the limits on your UPI credit card.
It is important to keep your UPI PIN confidential and don’t share it with anyone.
Review your UPI statements regularly to ensure that all transactions are accurate.
If you notice any unauthorized transactions, report them to your bank immediately.

How to make UPI credit card payments

To make UPI credit card payments, you need to follow these steps:

Open your UPI app and go to the “Send Money” option.
Enter the beneficiary’s UPI ID or bank account details.
Enter the amount you want to transfer.
Select “Credit Card” as the payment mode.
Enter your UPI PIN to confirm the payment.

Some UPI apps may also require you to enter the CVV of your credit card to confirm the payment.

Once you have confirmed the payment, your UPI app will send a request to your bank to process the transaction. Once the transaction is processed, the beneficiary will receive the funds instantly.