Is Linking Your Credit Card To UPI Worth It? Here Are Its Pros And Cons

While UPI payments are typically debited from your savings account immediately, credit card payments don’t affect your bank balance until the statement is due

UPI payments are growing at a faster pace than card payments

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A credit card is considered one of the most useful tools for making online payments today. It offers a high level of convenience and comfort, along with a range of rewards and cashback. Additionally, it is also important to note that UPI payments are growing at an even faster pace than card payments. According to the latest data from the RBI, UPI transactions hit a staggering 2.34 lakh crore in October 2024, reflecting a 37 per cent increase in just one year.

Interestingly, today you can combine UPI with a credit card. This would allow you to enjoy the best of both worlds—much like activating UPI services on your credit card, offering you the flexibility and benefits of both payment methods in one. But this facility also comes with its share of advantages and disadvantages.

Here Are Some Of The Advantages

1. Flexibility: Unlike UPI, a credit card offers the flexibility to use your credit line whenever you need it. While UPI payments are typically debited from your savings account immediately, credit card payments don’t affect your bank balance until the statement is due.
   
   
2. Bank Statement: When you pay for smaller expenses directly from your bank account, each transaction appears as a separate entry. With a credit card, however, only the total payment to the credit card appears on your bank statement, making it much cleaner and easier to manage.
   
   
3. One Platform For All Spends: Many UPI users also have a credit card, often for larger purchases. Instead of using multiple payment methods for different types of expenses, consolidating everything to one platform—your credit card—can help you simplify and better manage your finances.

Here Are Some Of The Disadvantages

1. Overspending: Having access to a credit line can encourage users to spend beyond their means. Since credit card payments don’t immediately affect your bank account, it’s easy to lose track of your budget. Linking both small and large expenses to your credit card can lead to unintentional overspending.
   
   
2. Risk Factor: While technology has made payments incredibly convenient, relying too heavily on one payment method can be risky. In the event of a technical issue or error, it could disrupt your entire payment system. It’s advisable to use multiple payment channels to reduce the impact of potential issues.
   
   
3. Limited Options: Not all credit cards support UPI activation, which could mean missing out on rewards and offers. For example, some cards provide exclusive access to events, golf privileges, or special discounts. If you limit yourself to a single card with UPI functionality, you may forgo these additional perks offered by other cards.