How UPI on Credit Cards Can Help You Improve Your Credit Score


Over the past few years, credit card adoption has grown tremendously, and experts say UPI has outpaced all other payment methods.

Gaurav Chopra, Founder and CEO of IndiaLends, said, “Bringing the two together is a boon for existing and underserved customers in India. UPI’s deep penetration and ease of adoption allow users from all walks of life to maximize the primary benefit of a credit card, which is short-term interest-free liquidity.

He further adds, “We can expect some customers to also switch from debit UPI to credit UPI for small expenses, to make the most of the interest-free period of their credit cards. A simple conversation with your panoramic roadside kiosk or Dhaba can help you see how UPI dominates payments even for small amounts, mainly due to the lack of MDR, but we cannot so much ignore the change in user behavior driving this adoption. The debate around zero MDR on UPI will continue for some time.

That said, when it comes to generating other rewards and benefits that credit cards are famous for, Chopra explains, “we’ll have to see if issuers take away the rewards and benefits or incentivize users to choose their credit cards. credit for payments”.
Experts say user behavior and business sustainability will ultimately set the direction of rewards and benefits.

How can UPI on credit cards help the user to improve their credit score?

An individual’s credit score is an essential part of their credit profile. Monitoring and maintaining a good credit score is imperative for anyone looking for credit. A good score gives the borrower peace of mind with pre-approved offers and translates into tangible savings through lower interest rates.

“A credit card can be a great product for those looking to build or repair credit, in addition to providing short-term, interest-free cash,” Chopra points out. Credit cards allow borrowers to start small and demonstrate responsible behavior, eventually improving their credit score and qualifying for higher limits or other types of loans.

Credit cards also have the reputation of being a product reserved for the elite, with apprehensions about acceptance by merchants. Chopra further adds, “UPI has changed that paradigm, allowing customers to make payments using their credit cards and providing more opportunities for those looking to build or repair their credit.”

However, note that having UPI compatible credit cards does not change the basic process for improving your credit score. Credit scores improve as long as you use your credit mindfully and pay it back on time. “UPI improves opportunities for customers to use credit and demonstrate responsible borrower behavior that would eventually result in an improved score,” Chopra concludes.


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