UPI Credit Cards Explained: The Future of Credit Transactions

UPI Credit Cards allow users to link their credit cards to UPI-enabled apps like Paytm, enabling them to make payments directly from their credit card instead of their bank account. This new feature, approved by the Reserve Bank of India (RBI) in June 2022, offers consumers the flexibility to use their credit cards for various UPI transactions, such as paying bills, transferring money, and shopping online.

Here’s how it works: When you make a transaction using your UPI Credit Card, the payment amount will not be debited from your existing credit card. Instead, the amount will be charged directly to your UPI Credit Card. For example, if you make a ₹10,000 purchase and choose the “Pay with UPI” option at checkout, you can select your linked credit card as the payment method. The amount will be charged to your UPI credit card, and you’ll authenticate the payment using your UPI PIN.

Once the transaction is complete, the amount spent will show up on your credit card statement at the end of the billing cycle. You can then repay the amount in full or in installments, depending on your card’s terms.

This feature offers a secure, fast, and convenient way to make payments while using your credit card limit. Plus, many UPI credit cards provide rewards or cashback, enhancing the overall experience.

How Does UPI Credit Card Work?

1. Link your credit card: Add your UPI credit card to a UPI app like Paytm.
2. Choose credit card for payment: Select your UPI credit card as the payment method when making a transaction.
3. Authenticate the payment: Use your UPI PIN to confirm the payment.
4. Payment deducted from credit card: The payment is charged to your credit card instead of your bank account.
5. Bill payment: The amount will appear on your credit card bill, which you can pay by the due date.

Features of UPI Credit Cards

• Seamless Integration: Link your credit card to UPI apps like Paytm for smooth transactions.
• Payment from Credit Limit: Payments are charged to your UPI credit card, not your bank account.
• Instant Payments: UPI credit cards enable real-time payments for both online and offline purchases.
• Security: Transactions are secured with UPI PIN authentication.
• Credit Line: Payments accumulate on your credit card bill, to be paid by the billing cycle’s due date.
• Reward Points: Many UPI credit cards offer rewards or cashback on transactions.
• 24/7 Accessibility: You can use UPI credit cards for payments anytime, anywhere.
• No Physical Card Required: Transactions can be made via the UPI app without needing to carry a physical credit card.

How to Make a Payment Through UPI Credit Card on Paytm?

Step 1: Open the Paytm app on your phone.
Step 2: Tap on ‘Scan & Pay’ or ‘To Bank A/c or UPI ID’.
Step 3: Scan the merchant’s or receiver’s QR code, or enter their UPI ID, then click on ‘Pay’.
Step 4: Select your UPI credit card from the list of available payment methods.
Step 5: Confirm the payment by entering your UPI PIN.