Linking Your Credit Card With UPI: What You Need To Know

Credit cards are convenient and flexible, and with the integration of UPI, transactions have become even more convenient. This implies that you can pay without having to consider about your bank balance. As it is essential to know both the advantages and disadvantages before availing of this facility.

UPI linking is presently only accessible for RuPay credit cards and is supported by 22 banks including majors like HDFC Bank, SBI Cards, ICICI Bank and Axis Bank.

How to Link Your Credit Card with UPI

Linking your credit card with UPI makes payments easier and more flexible. In order to link your credit card to UPI, open a UPI-compatible app such as Google Pay, PhonePe, Paytm, or BHIM. If you don't already have one download and install it now.

Navigate to the app's payment options and choose the Add Credit Card option. Enter your card information, verify it with the OTP that was sent to the registered mobile number and finish the procedure. After linking, you can use your credit card to make UPI payments as you would with a bank account which streamlines bill payment, transfer, and retail activities.

Benefits of Using Credit Cards with UPI

• Linking a credit card to UPI enables smooth payments without relying on the balance available in your account

• It increases the credit card's utility, facilitating payment at merchants that do not accept direct card payment

• Leveraging the billing cycle, consumers can delay payment, and thus it becomes simple to manage expenses and cash flows

• Credit card transactions via UPI are eligible for rewards, cashback, and discounts, maximizing the savings of users

• The multi-factor authentication capabilities of UPI, which include PIN and OTP confirmation increase security and lower the risk of fraud

Challenges of Using Credit Cards with UPI

• The convenience of UPI payment through a credit card can result in impulse buys and unsustainable spending

• As UPI payments are settled directly consumers can forget that charges have to be paid for at the end of the month, so they do not plan their finances well

• Credit cards based on UPI cannot be used to withdraw cash which can be a limitation in emergency situations

• Exceeding a predetermined spending limit on your credit card consistently may adversely impact your CIBIL score

Should you consider 

To decide whether to consider this option or not is determined by how well you manage your spending. When used correctly credit can be a simple way to make payments while earning incentives. But if you are unable to keep your costs under control, you may face financial issues.