India’s payments landscape has changed rapidly in the past few years. Unified Payments Interface (UPI) has made digital transactions simple, quick, and convenient. With the recent wave of credit card-issuing banks linking cards to UPI, users can now experience the combined power of seamless payments and credit benefits. But how has this integration changed the way people spend? Recent surveys indicate that nearly 75% of UPI users report higher credit card usage after onboarding their card to popular apps. Let’s explore what’s driving this trend and what it means for your wallet.
How UPI Made Credit Cards More Accessible
UPI initially started as a platform for instant transfers using bank accounts. Now, it supports credit cards from major issuers like HDFC, SBI, ICICI, Axis, and even RuPay-powered offerings. Linking your credit card to UPI means you can pay at any QR-enabled merchant, all without handling plastic or entering card details repeatedly.
- QR Payments Everywhere: From street vendors to premium retailers, UPI QR codes are present almost everywhere, making credit card acceptance universal.
- Simple Linking: With just a few steps, users can add their RuPay credit card to platforms like Google Pay, PhonePe, or Paytm.
- No Need for POS: Small businesses don’t have to invest in card-swiping machines; a simple QR code is enough.
What’s Driving Increased Credit Card Usage?
The merging of UPI and credit cards has changed user behavior in a few clear ways:
- Unlocking Card Benefits: Reward points, cashbacks, and other credit card benefits now apply with every UPI swipe.
- Small Ticket Spends Included: Earlier, people reserved cards for big purchases. But now, even a cup of tea can be paid using your credit card via UPI.
- Smooth User Experience: No need to carry a wallet or card. Just your phone is enough for almost all spends.
- Expense Tracking: Users find it easier to track expenses with all card UPI spends reflected in one statement each month.
- Instant Credit Card Approval: With fintechs and neobanks, many users get their card approved and linked within minutes, further driving up adoption.
Survey Insights: Numbers that Tell the Story
A recent nationwide survey suggests that 3 out of 4 UPI users who have linked their credit card have reported an uptick in monthly credit card spending. In particular:
- Frequent Small Transactions: Over 60% now use credit cards for transactions below ₹500 — previously rare.
- Increased Cashback Redemption: With more transactions, users redeem higher cashback, especially with cards like the SBI Cashback Credit Card.
- Preference Shift: Users prefer ‘Tap & Pay’ convenience, nudging traditional debit card and UPI-linked savings account spends lower.
Popular Credit Cards and UPI Integration
Not all cards support UPI yet, but the list is growing. The following standout options are widely used for UPI-enabled transactions:
- Jupiter RuPay Card – Offers strong cashback and UPI-friendly rewards.
- Federal Signet RuPay Credit Card – Best-in-class for UPI-linked transactions.
- Kiwi RuPay Credit Card – Simple rewards program tied to every UPI payment.
For a deeper look, use our card finder tool to compare UPI-compatible options.
UPI Credit Card Benefits You Shouldn’t Miss
- Reward Points on Every Spend: Earn on even the smallest daily purchases — tea, groceries, fuel — through UPI with your credit card.
- Cashback Credit Cards: Pair a card like Axis Bank Ace Credit Card or Amazon Pay ICICI Credit Card for best savings.
- Travel Rewards: Frequent travelers can use UPI-linked cards earning airline miles or lounge access rewards.
- Smoother Bill Payments: UPI apps support bill splits, automated reminders, and instant payments, making credit card spends more useful than ever.
Should You Switch Most Spends to UPI-Linked Credit Cards?
This trend shows clear benefits, but there are some points to keep in mind:
| Pros | Cons |
|---|---|
| – Earn rewards on even small purchases – Simple, fast payments on your phone – Better visibility on spending – Zero annual fee card options available | – Possibility of overspending – Payment failure issues in rare cases – Not all credit cards support UPI – Some small merchants may be wary of credit card-linked UPI |
Ideally, use UPI-linked credit cards for daily spends while keeping track of your monthly repayment capacity.
Top Tips for Maximizing Credit Card Benefits via UPI
- Choose a zero annual fee card or a lifetime free card.
- Set reminders for bill due dates. UPI makes it easy to spend, so avoid late fees by paying off your full balance monthly.
- Check reward categories often — some offers are UPI-exclusive.
- Compare credit cards for the best cashback or rewards on UPI transactions using the FinWitty card finder.
Frequently Asked Questions
Can I use any credit card on UPI?
As of 2024, only select RuPay credit cards are supported on most UPI platforms. Major issuers like HDFC, SBI, and Axis Bank now offer this feature. More cards and networks are expected soon.
Will I get reward points when I pay via UPI using my credit card?
Yes, most issuers consider UPI-linked credit card spends as regular transactions — so you continue earning rewards or cashback based on your card’s program.
Is there any annual fee for using credit cards with UPI?
No additional fee for UPI usage itself. Choose a lifetime free or zero annual fee credit card for maximum savings.
Are there transaction limits for credit card UPI payments?
Yes, RBI-mandated UPI limits generally apply. This can be up to ₹1 lakh per transaction, subject to your card type and bank rules.
Do all merchants accept credit cards on UPI?
Most merchants with QR codes accept UPI, but some may limit credit card acceptance due to MDR charges. Usage is growing as acceptance becomes widespread.
Conclusion: Harnessing UPI and Credit Cards for Smarter Spending
UPI and credit cards together make everyday payments easy and rewarding. Most users report higher credit card usage now, but the key is to use these tools wisely. Compare credit card offers, understand their benefits, and always keep your spending in check.
Ready to make the most of your credit card via UPI? Head to Find My Card or check out our latest credit card guides for UPI-exclusive offers and the smartest ways to spend!