Credit card UPI payment: Benefits and risks you should be aware of

Preeti, a working professional in Delhi, prefers using her credit card for rewards and the flexibility to buy on credit. Despite its advantages, she faced limitations while paying at small shops. To overcome them, Preeti activated UPI on her credit card. Now, she effortlessly pays for everything with her credit card. This also eliminated the need to carry physical cards, as she now made most payments seamlessly through her UPI-linked credit card.

If you wish to activate your credit card for UPI payments, you might be wondering about the benefits and risks associated with doing so. Let’s take a closer look.

What is a credit card on UPI?
 

The Reserve Bank of India (RBI) has added credit cards as a payment option to the United Payments Interface (UPI). By integrating your credit card with UPI, you will be able to pay directly from your credit card, which was previously only possible through your bank's savings account.

How does this work? A credit card for UPI payments uses the real-time UPI infrastructure, seamlessly linking your credit card to your bank account. With this technology, any UPI app can use an eligible, linked credit card to make instant, cashless payments.

​​Advantages of credit card on UPI
 

With a credit card on UPI, you can ditch the physical card. This is because it lets you pay instantly through various UPI apps using your virtual address and PIN.

Here are some other benefits of using a credit card for UPI payments - 

• Earn reward points:
  
  

  With every UPI transaction you make using your credit card, you earn rewards that can be redeemed later for various benefits.  For example, with the FIRST Digital RuPay Credit Card, if you spend above ₹2000 you earn 60 reward points. Multiply this across everyday purchases, and you will have significant savings.

• Unified digital wallet:
  
  

  By using a credit card for UPI payments, Preeti no longer has to carry her physical card. Instead, she can instantly make payments using her phone without juggling wallets or cash. It’s a one-tap solution for all her payments, big or small.

• Wider reach:
  
  

  Access millions of merchants accepting UPI, expanding your payment options beyond traditional card terminals.

Risks of adding a credit card on UPI
 

Currently, only RuPay credit cards are widely accepted for UPI payments. However, there are a few risks that you should be aware of:  

• Processing fees:
  
  

  Certain payments made via UPI using an underlying credit card may entail additional convenience or processing fees charged by the apps.

• High-interest rates:
  
  

  Unpaid credit card dues attract high interest rates—ranging from 18% to 48% per year. Comparatively, IDFC FIRST Bank Credit cards offer interest rates as low as 9% per annum.

• Debt trap risk:
  
  

  Preeti’s credit card provider offers appealing reward schemes, such as cashback or discounts on 300+ merchnats. This led her to go overboard with her credit card purchases. By the end of the month, she spent more than she could afford, risking herself into a debt trap.

​​Safety practices for credit card UPI payment
 

While security measures are robust, the digital landscape is not immune to risks. So, it would be best to remain vigilant against phishing attempts, unauthorised access, and other potential security threats. Here are some practices that you can follow to ensure safety - 

• Regularly monitor transactions:
  
  

  Stay vigilant by monitoring your credit card UPI payments on banking platforms. Quick detection of any irregularities can prevent losses.

• Set strong passwords and PINs: 

   

  Use complex passwords and unique PINs for your UPI app and linked credit card account. Also, never share these details with anyone.

• Choose trusted platforms:
  
  

  Opt for UPI platforms and credit card providers with a proven security and reliability track record. Choosing reputable platforms minimises potential risks.

• Be cautious of phishing scams:
  
  

  Don’t click on suspicious links or open attachments received via SMS or email, even if they appear from your bank or credit card company.

What is the FIRST Digital RuPay Credit Card?
 

IDFC FIRST Bank offers a unique digital credit card that provides the convenience of credit card transactions via UPI apps instead of relying solely on the physical plastic card. FIRST Digital RuPay Credit Card can be directly linked to popular UPI apps such as BHIM, PhonePe, PayTM, and Google Pay.

A few key benefits of FIRST Digital RuPay Credit Card are -

• Universally accepted payments: 
  
  

  The biggest benefit is the ability to use your credit card to transact across over 60 million merchant outlets in India. These are generally smaller shops that do not accept cards, but only cash and UPI payments.

• Rewards retention:
  
  

  Customers can enjoy the privileges of both their primary and virtual RuPay credit cards, including reward points and loyalty offers, such as movie tickets and dining discounts. All reward points get accumulated into a single credit card account remain intact even for credit card UPI payment transactions.

• EMI conversions:
  
  

  You can convert any digital card-based UPI transaction worth ₹2,500 or more into convenient EMIs through the IDFC FIRST Bank mobile app. 

• Cashback offers:
  
  

  You get 100% cashback up to ₹50 on your first four UPI transactions within 15 days of generating the card.

• Enhanced security:
  
  

  The additional UPI PIN requirement for authenticating each transaction adds security. Further, you can set customised usage limits on your digital card.

How do you apply for a FIRST Digital RuPay Credit Card?
 

Applying for the IDFC FIRST Bank Digital Credit Card involves only a few simple steps -

• Visit the IDFC FIRST Digital RuPay page
• Click on 'Activate Instantly’ if you are an existing IDFC FIRST Bank Credit Card user
• Enter your DOB and registered mobile number
• Enter the OTP sent to your registered mobile number, and that’s it.

On successful registration, you will be issued your FIRST Digital RuPay Credit Card instantly.

Sign up for hassle-free credit card UPI transactions

Linking credit cards with UPI lets you use your card even for small transactions, from buying coffee to paying for groceries and even sending money to friends. This means more convenience and potential rewards on everyday expenses, all without swiping your card. For instance, IDFC FIRST Bank RuPay Credit Cards, including the FIRST Power and FIRST Power+ Credit Cards, allow you to pay on credit using all major UPI apps. With this feature, you can easily and quickly manage your financial transactions. 

Additionally, IDFC FIRST Bank also offers you an option to link your non-RuPay IDFC FIRST Credit Cards to UPI, by opting for the virtual FIRST Digital RuPay Credit Card. So embrace the cashless future and enjoy the flexibility of credit card UPI payments.
 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.