Here’s the thing — the National Payments Corporation of India (NPCI) has issued clear rules for this.
If you make a UPI payment of up to ₹2,000 using your RuPay credit card, there are no charges at all.
That means if you’re buying groceries, paying for a cab, or grabbing a quick snack — and the bill is under ₹2,000 — you can confidently use your credit card through UPI without worrying about fees.
But what if your bill crosses ₹2,000? Let’s get into that.
The ₹2,000 Rule and the MDR Charge Explained
Once your payment exceeds ₹2,000, something called the Merchant Discount Rate (MDR) may apply.
Now, before you panic — this isn’t a charge you directly pay as a customer. It’s a small fee charged to the merchant (the shop or business) for processing the transaction. However, some merchants might indirectly pass this cost to you by slightly adjusting their prices.
Where Are These Charges Actually Applied?
Here’s some good news — small shopkeepers, local vendors, and grocery stores don’t have to worry about MDR. The charge mainly applies to large merchants, branded stores, and e-commerce platforms.
So, if you’re buying a pack of biscuits from your neighborhood kirana shop or paying for vegetables at a local market, your RuPay credit card UPI payment stays completely free.
Think of it this way: the rule protects small payments and keeps UPI affordable for everyone.
How to Link Your Credit Card to UPI
If you own a RuPay credit card, linking it to your favorite UPI app is super easy.
You can use Google Pay, PhonePe, Paytm, or BHIM — all of them support RuPay credit cards now.
Here’s how it works:
- Open your UPI app and go to “Add Account.”
- Choose the RuPay credit card option.
- Authenticate your card details with OTP verification.
- That’s it — you’re ready to pay by simply scanning a QR code.
Every time you make a payment, the amount is deducted from your credit card limit, not your bank balance — just like a regular credit card transaction.
Smart Tips for Using Credit Cards via UPI
Using UPI through your credit card is convenient, but remember — it’s still credit, not cash.
Here are a few tips to keep your finances healthy:
- Always pay your full bill by the due date to avoid interest or penalties.
- Use your card responsibly. Keeping utilization below 40–50% helps improve your credit score.
- Set up auto-debit from your bank account so you never miss a payment.
- Don’t rush into converting bills into EMIs unless you fully understand the extra costs involved.
- If you have multiple cards, track due dates, limits, and rewards — this helps you save more and pay smarter.
Why This Matters
UPI has transformed how India pays — it’s fast, free (mostly), and frictionless. By allowing RuPay credit cards to join the party, NPCI has made it even easier for users to enjoy the convenience of UPI with the flexibility of credit.
In short:
- Payments up to ₹2,000 = Free of charge
- Payments above ₹2,000 = Possible MDR (for merchants)
- Small stores & local vendors = No charge at all
So next time you scan that QR code with your credit card linked to UPI, you can do it with confidence.
Frequently Asked Questions
1. Can I use any credit card for UPI payments?
Currently, only RuPay credit cards are supported for UPI transactions. Cards issued by Visa or Mastercard are not yet eligible.
2. Is there a limit on UPI transactions using credit cards?
Yes. For RuPay credit cards, the maximum limit is set by your card issuer, but NPCI allows zero charges for payments up to ₹2,000.
3. Will using a credit card on UPI affect my credit score?
Yes, positively — if you pay your bills on time. Responsible usage and timely repayment can help boost your CIBIL score over time.
Final Takeaway
UPI via credit cards is the next step in India’s digital payment revolution — convenient, secure, and mostly free. So go ahead and enjoy the best of both worlds: UPI’s simplicity with the power of credit.
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