UPI Credit Cards: How to track small transactions and stay within your budget

UPI enabled credit cards are rapidly evolving the financial inclusion landscape in India. This is getting possible by combining convenience of UPI services with the benefits of seamless credit availability.

According to Kiwi's 2024 credit card trends report, these cards account for an average of about 40 monthly transactions per user. Now this number is about 8x i.e., eight times more than traditional credit cards. Just for an example of the growth, Rupay credit cards have witnessed their share jump from 3% in the year of 2023 to about 12% by the end of 2024.

These credit cards work by linking traditional credit cards to UPI applications like PhonePe, Google Pay, Paytm among others. Thus allowing users to make payments without using physical cards.

This stretches credit card utility to more than 320 million UPI touchpoints. These touchpoints include small businesses, local shops along with other similar outlets which lack point-of-sale (POS) machines.

Convenience comes with risk

It is clear that this service makes transactions seamless and hence risky as well. Frequent small transactions can lead to over spending, making it critical for credit card users to track balances carefully on regular intervals to avoid falling in the trap of debt.

It is also important for credit card users to evaluate reward structures, annual charges, customer support quality before choosing a card. They should also evaluate their credit scores, personal loan repayment capacity so as to manage risk properly.

What are the security precautions for UPI-enabled credit cards?

To ensure the security of your UPI-enabled credit card it is important to protect against unauthorized transactions and potential fraud. Here are key precautions to follow:

• Set a strong UPI PIN: Choose a unique and complex PIN that cannot be easily predicted. One should avoid using common combinations like birthdays or sequential numbers like 333, 444 or 777 etc.
• Avoid public Wi-Fi for transactions: Public Wi-Fi networks are prone to digital attacks and hacking. Hence, always use a secure, private internet connection when making UPI transactions.
• Enable transaction alerts: Through settings the users of credits cards should turn on SMS and email notifications for every transaction. This helps in monitoring activities in real-time and quickly identify any unauthorized transactions.
• Regularly check account statements: Users should check their credit card and UPI-linked account statements regularly. If you find any errors in charges, service fee etc., the issue should be escalated immediately to the concerned bank.
• Use Two-Factor authentication (2FA): opt for cards or UPI apps that support 2FA for better protection. This advanced layer of verification ensures that even if a user's PIN is compromised, unauthorized transactions can still be blocked.
• Download apps from official sources: Trusted sources like Google Play Store or Apple App store should be used to download UPI applications. This is crucial to prevent the risk of malware.
• Never share sensitive information: Never share your UPI PIN, OTPs, or associated account details over calls, text messages, or emails, even if the request appears to be from your bank. Do remember no bank ever requests for such personal details.
• Never accept unknown collection requests: Decline payments or collection requests from unknown senders, as these could be phishing attempts or targeted scams.
• Always report suspicious activity immediately: If you notice any unusual activity or unauthorized transactions, contact your bank or card issuer without delay to block further misuse. Time here is of immense importance, quicker response from your end can save you from larger financial losses.

Hence, by following these measures UPI enabled credit card users can significantly reduce the risk associated with digital transactions and secure a satisfactory financial experience. UPI-enabled credit cards hence simplify payments. Still, responsible usage and careful planning are key to maximizing benefits and avoiding financial strain. 

(Note: Using a credit card carries its own set of risks)