The Unified Payments Interface (UPI) has set a high standard for cashback and rewards on everyday payments and it has been established that credit cards provide similar advantages when used, albeit on certain kinds of transactions only. So, why not just combine them and enjoy the best of both worlds. That’s where UPI Credit Cards thrive. They’re nothing different from your usual credit card except that a user can link their credit cards to a UPI app like GooglePay for instance, and the payments that are made are charged to the credit card instead of debiting the bank account. So not only do you get rewards from the UPI app, but you’re also adding to the points on your credit card.
So how does this really work?
- Link the Credit Card of choice to the UPI app, this is similar to how one would link their bank account otherwise.
- When making the payment, choose the linked credit card as the method of payment in the UPI app.
- Authenticate the transaction with a pin, password or biometric scan.
- And once the transaction is processed, the amount is charged to the credit card.
Why Using a UPI Credit Card for Daily Expenses Makes Sense
1. Earn Cashback and Discounts: UPI credit cards often give you instant discounts or cashback offers at local grocery stores, cafes, petrol pumps, and supermarkets, even when you’re scanning a QR code, and these aren’t limited to big chains. For example, some credit cards, an example is Federal Bank RuPay Wave Credit Card, offer 10-15% off up to a certain amount on popular platforms and even flat discounts off on crossing certain spend thresholds on UPI, or a maiden transaction such as the IDFC FIRST Bank that offers a RuPay credit card with a ₹200 cashback on the first UPI transaction
2. Accumulate Reward Points on Every Transaction: Most UPI credit cards let you earn reward points per ₹100 spent, even on micro-transactions like chai or autos. Over time, these add up and can be redeemed for vouchers, fuel, flight discounts or even Amazon/Flipkart credits. Cards like SBI, Axis, and HDFC give 1.5–3 points per ₹100, depending on the card and spend category.
3. Cost Benefits Through Interest-Free Periods: Using a credit card gives you an interest-free window of up to 45–50 days on all spends, including UPI ones. So you can spend today and pay later without incurring interest, as long as you pay the full bill on time. That means your own money stays longer in your savings/investments, earning you more, essentially a free short-term credit line.
Also read: Ready to Elevate Your Lifestyle? The Times Black ICICI Bank Credit Card is for the Elite!
4. High Convenience: With UPI credit cards, you can just scan any merchant QR code and pay, even if the store doesn’t have a card swipe machine. This is incredibly convenient in India, where almost every stall or small store now accepts UPI. You don’t need to carry your physical card either, just link it in apps like BHIM, Paytm or PhonePe and you’re set.
5. Cleaner Expense Tracking and Smart Budgeting: Each UPI credit card transaction shows up on your monthly credit card bill with merchant details. This helps you track exactly where your money goes unlike vague UPI-to-bank payments. Plus, many credit card apps now categorise your spends, alert you when you cross limits and show you patterns to help you save better.
6. Boost Your Credit Score Without Taking a Loan: Every responsible credit card payment, including UPI spends, contributes to your CIBIL score. Using your card for small daily spends and paying on time helps you build a strong credit history which will help you qualify for loans or better cards in the future, even if you’re just starting out financially.
7. Safe, Secure and Reversible Payments: If there’s ever a wrong charge or fraud, UPI credit card transactions are backed by credit card-level protection, which is much stronger than bank UPI. You can raise disputes and get reversals far more easily. This adds a layer of safety, especially for unknown or first-time vendors.
Conclusion
Using a UPI credit card for daily expenses is a smart and easy way to get more out of the money you already spend. You earn rewards, enjoy discounts, and get extra time to pay — all while making quick and secure payments with just a scan. Just make sure to pay your bill on time, and you’ll enjoy the benefits without any downside.
Written by Teertha Ravi
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