January 20, 2026 · 5 mins read
Santosh Kumar
Like any other transaction made with a credit card, credit card payments made using UPI affect your credit utilisation ratio. Credit utilisation is the percentage of available credit that is currently being used on a credit card at any point in time. It is one of the most important metrics used to calculate your credit score because it indicates how much you depend on borrowed money. When you make payments using credit cards through UPI, you will have an outstanding balance on your credit card that will continue to increase until you pay off the balance.
Many people think that UPI Payments will be treated differently from traditional credit card payment methods because of how easy the UPI interface is to use. However, this is not true; UPI does not change how a credit card payment is reported. If the transaction is charged against your credit card, it is included on your credit report. Therefore, making small, frequent UPI Payments could negatively impact your credit utilisation ratio, especially if you have a low credit limit.
A high credit utilisation ratio may indicate to lenders that you are experiencing financial stress, even if you are making timely payments. It is recommended that consumers keep the utilisation of credit well below the available credit limit. While there is no definitive utilisation threshold, many credit professionals recommend keeping your credit utilisation under 33% of your total credit limit. If you exceed 33% on your UPI card and fail to pay it off promptly, it can negatively impact your credit profile.
One of the biggest challenges with UPI credit card payments is their ease of use. Since they are so convenient and are often utilised for everyday expenses, it can be easy to forget that every time you use a UPI credit card, you are also increasing the amount of money you owe. This can lead to unexpectedly large balances at the close of a billing period; therefore, if you do not pay off the balance before the statement is produced, you may have a higher utilisation ratio than is generally recommended.
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UPI credit card payments do not negatively impact your credit profile if you pay off the entire balance regularly or pay it off in full before the statement date. If this occurs, it can help keep your utilisation ratio at a healthy level. Thus, the most important thing to focus on is not so much your method of payment, but rather how much credit you are utilising versus how much total credit you have available and how quickly you are repaying the borrowed funds.
The way in which card issuers report your credit utilisation ratios will often impact how lenders view your ability to repay them. In general, the amount reported is typically what is referred to as the statement balance (which is usually close to the time stamp of when your payment was made). If you regularly use UPI during the month without making any intermediate repayments, your reported credit utilisation ratio may remain elevated even though you have every intention of paying the entire amount back next month. If you have an FD-backed or secured credit card, the same principles apply.
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Even though a secured credit card is backed by a fixed deposit and therefore allows you to use money from your bank account if you don't pay your bills on time (i.e., pay back your loan), you should still be held accountable for all of the money you have spent on your credit cards. When looking for a provider that offers these tools and resources, it is essential to find one that provides an easy-to-use interface and a comprehensive amount of information about your credit usage, repayment habits, and the overall impact of daily spending.
One such tool is ZETAPP. This platform is designed to help you better understand how you use credit, how and when you repay your loans, and the impact of your day-to-day spending on your financial future.
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Yes, UPI payments via credit card are treated as a regular charge on the card. Thus, they are included as part of the total outstanding amount.
Yes, UPI payments can negatively impact your Credit Score if the total of your UPI payments leads to a total outstanding amount that is high enough to push your utilisation above the healthy range.
Yes, by paying off your total amount outstanding before your Statement Date, you will be able to maintain lower utilisation levels for the upcoming report. Therefore, keeping utilisation low is a good way to improve your credit profile.
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