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Mint
08-07-2025
- Business
- Mint
How to use credit cards smartly to earn rewards on UPI transactions
UPI has become the most preferred mode of digital payments in India, quick, seamless, and accepted almost everywhere. What if you could turn those everyday QR code scans into cashback? Thanks to a move by the Reserve Bank of India (RBI) in 2022, you can link RuPay credit cards to the Unified Payments Interface (UPI) and earn rewards on your daily transactions. Since then, most major banks have introduced RuPay variants of their credit cards, including versions of their Visa or MasterCard cards, which can be used for UPI payments. Some have even launched exclusive UPI credit cards offering 1.5–5% cashback. This story breaks down how to effectively use credit cards to earn rewards on UPI transactions and lists some of the most rewarding cards in this category. All about UPI credit card A UPI credit card allows users to pay merchants via UPI using their credit card instead of a bank account. However, these payments are restricted to customer-to-merchant (C2M) transactions only, not peer-to-peer (P2P) transfers. This limitation prevents users from misusing credit by revolving credit and sending funds to the bank accounts of friends or family. When attempting to pay a UPI ID or scan a QR code linked to a personal account rather than a merchant, the credit card option will not appear. This means you stand to earn rewards while paying a grocery store or an auto driver through their business UPI QR using your credit card, but you cannot use this method to send rent to your landlord. UPI credit cards are especially helpful to users in tier-II and smaller cities, where many small merchants do not have POS machines, but most accept UPI. Also Read: Credit Card hack to get higher rewards on bulk payments Why aren't all merchants accepting it yet? Despite a strong start, UPI payments via credit cards have seen some pullback from merchants due to merchant discount rate (MDR)—a fee businesses must pay to banks or card networks for processing such payments. Regular UPI transactions don't carry this charge, but credit card-based UPI payments do. 'Almost all payment gateways charge a normal card's MDR if the payment amount exceeds ₹2,000 per transaction. Shops like medical stores and local grocery stores, where the bill can be more than ₹2,000, are disabling the RuPay UPI option to avoid MDR charges," said Sumanta Mandal, founder, TechnoFino, a digital platform. However, since daily UPI payments are made to small merchants, these are generally under ₹2,000 per transaction. Also Read: Top 3 travel credit cards to earn free flights and hotel stays Can I use my existing cards? Customers with credit cards from networks like MasterCard or Visa who want to make UPI payments through their credit cards can request their bank to issue a virtual Rupay variant of the same card for that purpose. While it's a separate card, the credit limit is part of the overall limit of the primary card. In the past year, some banks have launched credit cards exclusively designed to reward UPI spending such as HDFC Tata Neu, Yes Bank Klick, Axis Bank Supermoney, and Jupiter Edge CSB. Of these, Axis Supermoney card and Yes Bank Klick card used on Kiwi app currently offer the best reward rates up to 3% and 5%, respectively, as per Kashif Ansari,an assistant professor of finance at OP Jindal University and a credit card expert. 'HDFC Tata Neu used to be the most rewarding, but Axis Supermoney and Kiwi are far superior now," according to Ansari Mandal said, 'Both Yes Bank Klick and HDFC Tata Neu give 1.5% value back when used on partner UPI apps. However, the Tata Neu app is slow." Both these cards are launched in association with third-party UPI apps–Yes Bank and Kiwi and Axis Bank and Supermoney (Flipkart owned)–and offer highest rewards only when used on these apps. Also Read: UPI Circle lets you make payments for friends and family. Here's how it works. Yes Bank Klick–Kiwi card rewards on scan and pay UPI payments made through Kiwi app. The base reward rate is 1.5%, which increases to 2% if you opt for Kiwi Neon membership. The major restrictions on this card are that it rewards on a minimum ₹100 payment and that there are many exclusions. Categories that don't earn rewards or add to spending milestones include utilities, insurance, jewellery, financial institutions, educational institutions, government services, and retail outlets, such as apparel stores. Axis Supermoney card rewards a flat 3% cashback on all scan and pay UPI payments done on the supermoney app. However, the maximum monthly cashback is capped at ₹500. This means you earn cashback on eligible UPI spends of upto ₹16,667 every month. The upside with this card is that it is a physical card and hence can be used for offline transactions also that earn 1% cashback, subject to the monthly ₹500 cap. All other non-UPI online payments also earn 1% cashback. Several spending categories are excluded from earning rewards on this card as well, including fuel, jewellery, cash withdrawal, wallet load, insurance, education, government services and rent. Ansari said UPI credit cards are meant for small regular payments made to small merchants who don't offer POS services. Hence, such exclusions are expected.
Mint
23-06-2025
- Business
- Mint
Top 3 travel credit cards to earn free flights and hotel stays
Looking to earn free flight tickets and hotel stays through your credit card reward points? It's not as simple as picking one 'best" card, experts say. The ideal choice depends largely on how much you spend annually and what categories you spend on, said Sumanta Mandal, founder, Technofino, a digital platform that reviews credit cards and other banking products. 'It depends on both the spending volume and the categories—whether it's discretionary spends like travel and shopping, or recurring expenses of utilities, groceries and fuel," he explained. Most travel-focused cards offer the highest rewards on discretionary expenses. While it's possible to earn points on routine expenses like utilities, groceries, and even school fees, if your major expenses fall in these categories you may have to temper your expectations. Adding to the complexity, not all cards reward every type of expense equally. For example, payments towards fuel, insurance premiums, taxes, and education fees on some cards may not earn rewards, or may earn very little. That's why many users find it useful to hold more than one card to maximize reward points across categories. That said, there's no need to go overboard. 'Two to three well-chosen cards are usually enough to cover most major expenses and optimize travel rewards," said Mandal. The key is to swipe the credit cards for everything from groceries and dining to utility bills and insurance payments. However, substantial spending is essential to unlock meaningful travel benefits. 'Credit cards only yield significant travel rewards at higher spending levels," said Tejas Ghongadi, co-founder of The Points Code. 'If your total annual spending, including discretionary and utility expenses, is under ₹10 lakh, cashback cards are likely a better fit. You wouldn't earn enough rewards for meaningful redemptions." In this story, Mint recommends three of the best travel-focused credit cards for two types of users: moderate spenders with annual expenses of ₹10-15 lakh, and high spenders who exceed ₹15 lakh in annual expenses. The spending limits are exclusive of rent and fuel as almost no credit card gives travel rewards on these. Annual spending of ₹10-15 lakh Axis Atlas stands out as a valuable travel credit card for moderate spenders. It earns 2 Edge Miles (EMs) per ₹100 on all regular expenses, including offline purchases and education fees, and 5 EMs per ₹100 on flight and hotel bookings. Bonus EMs of 2,500 each are awarded on reaching ₹3 lakh and ₹7.5 lakh spending milestones. EMs can be redeemed either for revenue bookings via the Axis TravelEdge portal at 1 EM = ₹1 value or transferred to airline and hotel partners. Revenue bookings are done by using reward points to book flight tickets or hotels directly instead of transferring rewards to airline or hotel partners. Transfers offer a higher reward rate at 1:2 transfer ratio for most partners, except Marriott Bonvoy at 2:1, translating to a 4-10% effective return versus 2-5% on revenue bookings. 'Atlas can serve as your primary travel card, especially for those who transfer miles to partners like Accor for up to a 10% reward rate," said Mandal of Technofino. However, a key limitation is the annual cap of 30,000 EMs for transfers to premium partners like Qatar Airways, Singapore Airlines, Accor, Marriott, United Airlines, and Wyndham. 'Once you hit the 30,000-point cap, typically after ₹7.5-8 lakh in spending, any additional EMs earned become unusable until the next year," Mandal added. Still, those 30,000 EMs can fetch up to 8-10 nights at Accor hotels in Europe, where 1 point is worth about ₹1.9. Also read | How this family packed food, fun, and Fuji into a ₹5.5 lakh Japan adventure 'In that sense, Atlas stands out as a rare card that delivers maximum value even for low spends of ₹7-8 lakh. However, the high reward rate at this spending level is limited to Accor as the transfer partner," said Ghongadi of The Points Code. After maxing out Atlas rewards, Ghongadi suggests considering the HSBC TravelOne or American Express Platinum Travel cards. With Amex currently not issuing new cards, HSBC TravelOne is a strong alternative. It offers 2% rewards on regular expenses, 4% on travel, and around 8% when transferring to Accor. TravelOne also offers a 15% instant discount on bookings via Yatra, Cleartrip, EaseMyTrip, and Paytm, with rewards earned on the discounted amount. For example, a ₹10,000 booking would be reduced to ₹8,500, which then earns 4% rewards. Both Atlas and TravelOne exclude utilities, jewellery, and tax payments from rewards. Additionally, Atlas excludes insurance, while TravelOne excludes education fees. Also read | How real estate helps Vijay Kedia invest in stocks Annual expenses over ₹15 lakh HDFC Bank's Infinia and Diners Club Black (DCB) Metal are among the most rewarding credit cards for high spenders. Both offer a strong base reward rate of 3.33%, access to the same transfer partners, and a 1 RP = ₹1 redemption value on HDFC's SmartBuy platform. Where these cards truly shine is with accelerated rewards on SmartBuy. Hotel bookings earn 10X points, while flight bookings get 5X rewards on both cards. Infinia also gives 5X rewards on gift voucher purchases. A key difference lies in monthly reward caps: DCB limits bonus RPs to 10,000, while Infinia allows up to 15,000. Both cards are ideal for users who are new to loyalty programmes and prefer revenue bookings over miles transfers since RPs redeem at 1 RP=Re 1 value on SmartBuy. In comparison, the points transfer ratio ranges from 1:0.5 to 1:1. Another strong contender in this segment is ICICI Emerald Private for those favouring straightforward revenue bookings. Also read | Diderot's Curse and the BNPL Trap: Why India's middle class may be walking into a debt crisis A better rewarding card for this category is Axis Magnus Burgundy. However, it is meant for the very rich, or ultra-high-net-worth individuals. With a steep annual fee of ₹35,400, eligibility requires a Total Relationship Value (TRV) of ₹30 lakh in fixed deposits and savings accounts, ₹10 lakh quarterly average balance, or a ₹3 lakh monthly salary in an Axis account. For those spending over ₹25 lakh annually, Magnus Burgundy's superior 5:4 miles transfer ratio can be highly rewarding. However, there's no need to hold all three cards. 'A combination like Atlas and DCB or Infinia is usually enough," said Ghongadi. 'Holding both Magnus and Atlas means overlapping exclusions—like jewellery spends are excluded on Axis cards but not on HDFC." Choosing between DCB and Infinia depends on an individual's spending pattern. 'If you consistently hit ₹4 lakh in quarterly spends, DCB's extra 10,000 RPs adds a 2.5% reward rate boost. On the other hand, for those heavily into gift vouchers, Infinia's 5X rate makes it more valuable," Ghongadi explained. Also read | Risk of narratives: When everyone saw it coming and still got it wrong How much spending will get you free flights, hotels Once you've chosen your credit cards, you need to assess how much you need to spend to earn free flights and hotel stays. According to Mandal, those with annual expenses up to ₹15 lakh can typically earn enough points for either free hotel stays or business class tickets, but not both. 'For example, a couple might earn enough for two flight tickets with ₹15 lakh in annual spending," he said. For a family of four aiming to cover both flights and hotel stays, the requirements are steeper. 'You'd need around 150,000 reward points, which typically means spending about ₹40 lakh annually, primarily on discretionary categories," Mandal explained. Ghongadi agreed. 'Quarterly spends of ₹10-12 lakh can generate enough points for a family of four to enjoy one holiday per year, covering both flights and hotels." That said, mid-range spenders should manage their expectations and avoid overspending just to chase rewards. 'Banks tend to offer higher rewards on discretionary spending because these categories increase the likelihood of overspending and default," Ghongadi cautioned. 'Cardholders must stay disciplined and not fall into that trap." Also read | Why wealth management shouldn't be reserved for the rich
