India’s digital payment revolution has taken another leap forward with UPI Credit. After UPI (Unified Payments Interface) transformed how we transfer money instantly, the credit feature is adding more convenience by linking credit cards directly to UPI apps like PhonePe, Paytm, and Google Pay.
But what exactly is UPI Credit, and how does it work? Let’s simplify.
What is UPI Credit?
UPI Credit allows you to link your credit card (like RuPay credit cards) to a UPI app. Instead of only using your bank account balance, you can now make UPI payments directly using your credit line.
➡️ Example: If your credit card is linked to UPI, you can scan a QR code at a shop and pay through credit instead of debit/bank account.
How Does UPI Credit Work?
Link Your Credit Card:
Open your UPI app → Add account → Select “Credit Card” option → Link RuPay credit card.
Make Payments via QR Code/UPI ID:
Choose your credit card as the payment source.
Scan QR code or enter UPI ID.
Amount is charged to your credit card.
Repayment:
Just like any other credit card transaction, you’ll repay the amount in your credit card bill cycle.
Benefits of UPI Credit
Instant & Cashless: Pay anywhere UPI is accepted.
Reward Points & Cashback: Earn credit card benefits on small UPI payments too.
Convenient: No need to carry card, just use your UPI app.
Better Credit Access: Helps people build credit history.
Universal Acceptance: Works at most shops with UPI QR codes.
Limitations of UPI Credit
Currently Limited to RuPay Cards: Visa/Mastercard UPI linkage is still rolling out.
Overspending Risk: Easy access may lead to unnecessary debt.
Merchant Restrictions: Some merchants may not allow UPI Credit (due to charges).
UPI Credit vs. Normal UPI
| Feature | Normal UPI (Bank A/c) | UPI Credit (Credit Card) |
|---|---|---|
| Source of Money | Your bank account | Credit card line |
| Repayment | Instant debit | Monthly bill cycle |
| Rewards | Rare | Credit card points/cashback |
| Acceptance | Universal | Growing (mainly RuPay cards) |
Who Should Use UPI Credit?
Smart Shoppers: To earn rewards/cashback on daily payments.
Young Professionals: To build credit history.
Frequent UPI Users: Who want flexibility of paying later.
⚠️ Use responsibly! Overspending on credit may lead to debt traps if bills aren’t paid on time.
❓ FAQs
1. Can I link any credit card to UPI?
Currently, mainly RuPay credit cards are supported. Other networks are being rolled out.
2. Does UPI Credit affect credit score?
Yes. On-time payments boost credit score, late payments hurt it.
3. Is UPI Credit free?
The feature is free, but normal credit card charges (interest, late fees) apply.
4. Can I withdraw cash using UPI Credit?
No. UPI Credit is only for merchant payments, not ATM withdrawals.
Published on : 28th August
Published by : SMITA
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