In 2025, UPI is everywhere—from tea stalls to petrol pumps. But with the rise of UPI-enabled credit cards, there’s growing curiosity and confusion around one critical question:
Will using a credit card on UPI hurt my credit score?
Let’s dive into this topic and clear the air once and for all.
What Is a UPI Credit Card?
A UPI credit card, typically powered by RuPay, allows you to make payments via apps like PhonePe, Paytm, or Kiwi, but instead of debiting your bank account, it charges your credit card.
It combines the ease of UPI with the benefits of a credit card, rewards, cashback, and a billing cycle. But because it’s still a credit product, your usage behaviour gets reported to credit bureaus just like with traditional credit cards.
Does Using UPI Credit Cards Affect My Credit Score?
The short answer is no, using a UPI credit card doesn’t hurt your credit score on its own.
However, how you manage that credit will directly influence your credit score—for better or worse.
Common Misconception: “UPI is Like Debit, So It Doesn’t Affect My Score”
This is a myth. The UPI interface doesn’t determine how your transaction is classified. If the source of funds is a credit card, then it’s a credit transaction, regardless of how it’s paid.
This means everything from spending limits to repayments is still tracked by credit bureaus.
How UPI Credit Card Usage Can Affect Your Credit Score
1. On-Time Bill Payment
Paying your credit card bill on time, whether you’ve used it via UPI or traditional swipe, helps build a strong repayment history. This is the most important factor in maintaining a healthy credit score.
2. Credit Utilisation Ratio
Using a large portion of your credit limit—say 80 to 90% —can negatively affect your score, even if you pay on time. Keeping utilisation under 30% is ideal.
3. Building a Credit Profile
If you’re new to credit, using a UPI-enabled credit card helps establish your credit history. Timely payments and responsible usage contribute positively to your credit report.
4. Missed or Delayed Payments
UPI may feel like a fast, easy way to pay, but remember—you’re still borrowing. A missed payment on your UPI credit card will reflect on your credit report and lower your score.
5. Multiple Credit Applications
Applying for too many credit cards in a short span (including UPI-linked ones) can result in hard inquiries, which may impact your credit score temporarily.
A Real-Life Example
Ankit, a 24-year-old freelancer, started using a UPI-enabled credit card, thinking it was just like a debit card—fast, simple, and casual. He forgot to pay his bill on time, and his Experian score dropped by over 40 points.
He learned the hard way that UPI is only a payment method—the financial responsibility is the same as any credit card.
Best Practices to Protect (and Improve) Your Credit Score with UPI Credit Cards
- Only use your UPI credit card for purchases you can afford to repay
- Always pay your credit card bill in full before the due date
- Track your spending using your card app or a budgeting tool
- Keep credit utilization below 30%
- Set reminders to avoid missed payments
- Avoid applying for multiple credit cards unnecessarily
Why Kiwi Makes UPI Credit Cards Easier to Manage
If you’re looking to get started with UPI credit cards, Kiwi offers a smarter way to enter this world.
With Kiwi, you can:
- Apply for RuPay credit cards that support UPI payments
- Use your credit card at any store* that accepts UPI
- Track your spending, cashback, and bill due dates in one dashboard
- Enjoy the benefits of credit with the ease of UPI
Kiwi helps you use your UPI credit card responsibly while maximising rewards and convenience.
Explore Kiwi at gokiwi.in and start building a stronger credit profile—without the stress.
Final Thoughts
Using a credit card on UPI does not hurt your credit score—mismanaging it does.
UPI is simply a faster way to use credit. Treat your UPI-enabled credit card like any other credit product: spend within your means, pay on time, and track your usage. Done right, it can even help boost your credit score over time.
