If you use a credit card and are obsessed with online payments at the same time, you may want to explore UPI credit cards.
While UPI allows you to make payments directly via bank account, a credit card helps you make use of credit for carrying out transactions. UPI credit card, therefore, helps you give the best of both worlds where you make instant online payments via digital interface without having to record that transaction in your bank account.
This is how it works: If you make a ₹50 payment every day for 30 days, the UPI enables you to transfer those 50 bucks straight from your bank account to the merchant. However, your savings bank account shows 30 transactions over a period of 30 days.
On the other hand, if you use the UPI credit cards, those transactions are still done via the UPI app such as PhonePe but the payment is deducted not directly from your bank account but via the credit card. In this case, your bank account will show only one transaction at the end of the month i.e., when you make the payment of ₹1,500.
If you are also considering using UPI credit card, remember that it offers several advantages.
UPI credit cards: These are the 5 key advantages
1. Wider acceptance: Conventionally, a large number of small vendors and offline merchants accept only UPI payments, and not cards. A UPI credit card enables you to pay via UPI even where card machines are unavailable.
2. 45-day interest free credit period: Just as regular credit cards, UPI credit cards offer an interest-free period (which can be 45-day long), enabling you to make purchases now and pay later without letting funds leave your bank instantly.
3. Rewards and cashback: Unlike debit cards, UPI credit cards may offer reward points, cashback and discounts on transactions — including everyday UPI payments.
4. Fraud protection mechanism: UPI credit cards come with built-in fraud protection mechanisms, zero-liability policies, and two-factor authentication, which are safer rather than linking your savings bank directly to UPI.
5. Impetus to credit Score: Using a UPI credit card and making timely repayments can help you build credit score, which helps secure better loans and credit offers in the future.
(Note: Using a credit card carries its own set of risks)
