The Magic of Credit Cards on UPI
For years, UPI payments drew directly from our bank accounts. That has changed. Now, you can link specific credit cards—primarily RuPay cards, with Visa and Mastercard increasingly joining—to your favourite UPI apps like GPay, PhonePe, or Paytm. When
you scan a merchant's QR code, you can choose to pay using your credit line instead of your savings account. This gives you an interest-free credit period and, more importantly, the ability to earn reward points on even the smallest of your daily spends. However, it's crucial to know that this facility is only for paying merchants (P2M transactions); you cannot use it to send money to individuals (P2P).
Choose Your Card Wisely
Not all credit cards are created equal, especially when it comes to UPI spends. Most banks offer reward points on UPI transactions, but the earning rate can be lower than on regular card swipes. The key is to find a card that both allows UPI linkage and offers a strong travel rewards program. Cards co-branded with airlines or those with flexible point transfer systems are your best bet. For instance, premium cards from banks like HDFC, Axis, and others allow you to convert your accumulated bank points into air miles with various airline partners. Before applying, scrutinise the card’s reward structure for UPI spends and check its list of airline transfer partners to ensure it aligns with your travel goals. Some cards may exclude categories like fuel or utility payments from earning rewards on UPI.
The Strategy: Earn, Transfer, and Fly
Getting a free flight is a three-step process. First, you consistently use your linked credit card for all eligible UPI merchant payments to accumulate a significant number of reward points. Second, once you have a healthy balance, you need to convert these bank points into airline miles. This is done by logging into your credit card's online portal or app, navigating to the rewards section, and selecting the option to transfer points to a travel partner. You’ll need to have a frequent flyer membership with the airline you choose (like Vistara's Club Vistara or Air India's Flying Returns), which are free to create. The conversion ratio is critical; for example, a bank might offer a 1:1 or 2:1 ratio, meaning 1 or 2 bank points get you 1 airline mile.
Booking Your 'Free' Flight
After the points appear in your frequent flyer account (which can take a few business days), you can book your flight. It’s important to understand that 'free' typically covers the base fare of the ticket. You will almost always have to pay for taxes, surcharges, and other fees out of pocket. To book, you log into the airline's website, search for flights using the 'Redeem Miles' or 'Award Travel' option, and select your desired flight. The system will show you the number of miles required plus the amount for taxes. The best value from airline miles often comes from booking business or first-class tickets, where the cash price is exceptionally high, making your points worth significantly more. For economy seats, sometimes booking directly through the bank's portal might offer better value.
