I don't understand clearly this part of the payment policy:
"Only accept payment through Upwork, ensuring Payment Protection.
Receiving payment outside of Upwork violates your user agreement and could result in suspension or legal action."
Can't I use my card for other personal payments? Ex: My parents transfer me money each month, would that be illegal? Or if someone owe me money?
I mean how would Upwork know when the transaction is outside of the Upwork clients?
You misunderstood this rule completely.
You can do whatever you want with your personal finances.
The rule has nothing to do with any of that.
Here is what the rule means.
Clients hire freelancers on Upwork.
The freelancers get paid through Upwork.
Basically: Client can't send money to freelancers.
Circumvention is when a client and freelancer meet on Upwork, but choose to conduct their relationship outside of Upwork, typically by sending payment through another means outside the platform. Learn more here.