The Reserve Bank of India (RBI) has recently expanded UPI’s scope beyond savings accounts and debit cards – you can now link your credit cards to UPI. This development raises an important question: Is linking your credit card to UPI a smart move for you? Let’s explore the benefits The most immediate benefit is the remarkable convenience it offers. While credit cards were previously limited to specific card-accepting merchants, linking them to UPI opens up a world of possibilities. You can now pay at any UPI-enabled outlet, from your local vegetable vendor to your neighbourhood chai stall. The reward benefits are equally enticing – imagine earning credit card rewards even on your smallest UPI transactions, with potential cashback ranging from 1-5% on purchases. Moreover, you gain enhanced purchasing power, as credit cards typically offer higher spending limits than debit cards – a particularly valuable feature during emergencies. What are the hidden risks? However, this convenience comes with its share of caution. The ease of UPI payments combined with credit card spending power could lead to impulsive purchases, making it easier to overspend without realising it. There’s also the risk of falling into a debt trap, as attractive reward programmes might tempt you to spend beyond your means. Perhaps the most significant concern is the high interest rates—Indian credit cards charge between 18% and 48% annually. Missing your monthly payments could mean paying more interest than your original purchase amount. Is that right for you? While linking your credit card to UPI can offer tremendous convenience and rewards, it requires financial discipline. The key is to ensure you can fully settle your credit card bills by their due dates. Think of it as a powerful financial tool that needs to be used responsibly and with awareness.Original Article