Many people want to use their credit cards to have liquidity. Therefore to make UPI more useful for consumers and give a wings to credit card issuers, the Reserve Bank of India (RBI) allowed linking credit cards to make UPI payments in June 2022.
Presently, the facility is only available for RuPay credit card users. So if you have a Visa or MasterCard credit card, you won't be able to use it for UPI payments.
Top six reasons to link your credit cards to UPI apps -
🔖 You can scan the merchant QR code and make the payment from your credit card through your preferred UPI app.
🔖 Post linking, you can make mobile recharges, initiate bill payments.
🔖 Making such payments from a credit card (via UPI) gives you liquidity, and you also earn reward points from your credit card company.
🔖 To use your credit card, you don't have to carry it everywhere.
🔖 You don't always have to use your credit cards for UPI - if you have exhausted your credit card limit - you can choose debit cards for making payments on the same UPI app.
🔖 The RuPay credit card will not take any charges on UPI transactions up to Rs 2,000.
Restriction on using credit cards for UPI payments -
When it comes to credit cards, people start looking for loopholes in the system. Are you thinking something like this e.g. you will transfer X amount to your friend's account via credit card using UPI, take the money from him, and use the cash for different purposes?
Reserve Bank of India (RBI) has ensured that the facility is not misused, and hence there are restrictions on usage. To learn in details, you can join The RBI Compliance Group, exclusively for Bankers & DSA. Go to: rbicompliance.com
📌 You are not allowed to transfer money from your credit card (RuPay) to your individual UPI ID.
📌 You cannot make payments to any other credit card, that has UPI integration. In other words, you can't pay into someone else's credit card via UPI using your credit card.
📌 The facility does not permit money transfers to small merchants who have inward UPI remittances less than or equal to ₹50,000 per month. Only Payment to Merchants will be allowed from the UPI-linked RuPay credit card.
Things to understand before linking your credit card for UPI payments -
📌 The experts at OZGfinance has taken initiative to educate the public on all the different types of financial and investment products available in the money market as well as the capital market through various informative posts, awareness campaigns and webinars. You can get benefit of it.
📌 If you are a new credit card user, you need to be careful that you are not exhausting your credit limit. Since you don't need the money in your bank with this facility, there could be a tendency to overspend.
📌 If you fail to make the payments on time, you must know that the interest charged by these credit card companies is very high. You may fall into a debt trap if you don't manage your usage well.
Email: ask@ozgfinance.com
.jpg)
