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Kolkata: One can link one's credit cards to UPI platforms in India, which makes it a potent combination to earn reward points for the user since every UPI payment is done through credit cards and not the bank account of the user. The basic point is one has to delink one's UPI account from one's bank account and replace it with the credit card so that the amounts spent are done through the credit card.
The transaction will be recorded as a UPI payment, but the money will be sourced from the credit card. This will allow you to reap all benefits that is offered by credit card for payments through the card. It is available on the RuPay network. There is another pertinent point: those payments that are P2M, or peer-to-merchant qualify for credit card benefits. Simply put, it means if you are paying some money to your friend from your credit card, it will not earn you reward points.
Anything from 1% to 2% can be earned as reward points in these P2M transactions. Google Pay, PhonePe and Paytm are allowing direct linking of credit cards. This allows the user to delay payment, at least during the period of interest-free credit, which is actually a bonus besides the reward points that the credit card offers.
In order to maximise the reward points you can link your credit card to payment of electricity or phone bills, payments like insurance, expenditure for grocery etc. However, keep in mind that you cannot use this route to make investments such as mutual fund SIPs. Also check if there is a ceiling on the amount you can spend on different categories as some banks have a monthly limit for some categories.
Also you have to check whether the credit card you use allows a linking with an UPI app. Also the rewards will be maximised if your credit card allows cashback for online shopping. Another important point is to make the credit card payments in full before the expiry of the interest-free period to avoid interest payments, which will outstrip your benefits from the reward points or cashback.
However, one must keep on mind that credit cards constitute the most expensive loans that one can avail of from the organised credit market. Therefore, one should not use the credit card indiscriminately beyond 30% of the approved credit limit so that there is no injury to one's credit score. Simply put, don't overspend vai your credit card to earn reward points.
