As fuel prices continue to surge in India, a fuel surcharge on credit cards may take one of the biggest tolls on your wallet. It could become a significant concern if you use your personal vehicle for your daily commute.
However, many credit card companies also offer waivers on fuel surcharge, which helps you save money on fuel purchases. By knowing about fuel surcharges and waivers on credit cards, you can optimise your benefits on refuelling your vehicle.
What is a Fuel Surcharge on Credit Cards?
Here’s a brief overview of the fuel surcharge on credit cards:
- It is an extra fee that you need to pay when making fuel purchases using a credit card
- Credit card issuers levy this fee to cover the additional processing costs associated with fuel purchases.
- Wondering why this happens? Simply because petroleum corporations are not entitled to bear additional charges for credit or debit card transactions.
- This fee can range between 1-2.5% of the transaction amount.
How is the Fuel Surcharge Calculated?
Avoid stumbling upon fuel surcharge on credit card bills as an unwelcome surprise by knowing how issuers calculate it. See the example below to understand it better:
- Say you purchase fuel for ₹1,000 using your credit card.
- Assuming fuel surcharge is 1%, the surcharge amount would be ₹10.
- A GST of 18% will apply on fuel surcharge, which will be ₹1.8.
- The total amount that will be deducted from your credit card limit will be ₹1,011.80.
What is a Fuel Surcharge Waiver on a Credit Card?
The best way to avoid fuel surcharge is to choose a card that offers a waiver. Here is how fuel surcharge waivers work:
- By qualifying for a waiver, you can cancel out or reduce the fee on fuel purchases.
- Unlike credit card reward offers, these waivers are only available on transactions made at fuel stations.
- Every credit card company has a pre-specified limit eligible for a fuel surcharge waiver on a transaction.
- Remember, it isn’t a discount on fuel purchases but simply reduces the additional cost of using your card at fuel stations.
How Can You Get a Waiver on Fuel Surcharge?
A surcharge waiver is an attractive option that maximises savings. However, you need to keep a close watch on the conditions credit card companies set for you to enjoy these benefits. Generally, these include:
Partner Fuel Stations
- These waivers are typically applicable on fuel stations associated with the credit card.
- Check the list of partner fuel pumps to ensure that you can get this benefit.
Minimum Transaction Amount
- Some credit cards also have a minimum spending threshold on fuel stations to get a waiver.
- This entails that the surcharge waiver is applicable only on substantial fuel purchases.
Timely Payments
- Some issuers provide waivers on fuel purchases as credit card reward offers.
- Hence, maintaining a good repayment history is crucial to maximise your savings.
Maximum Waiver Limit
- Some credit cards come with a monthly or annual limit on the amount of fuel surcharge waiver you can claim.
- If you make purchases beyond this limit, you’ll have to bear this additional cost.
Annual Fees
- Most credit cards offering these surcharge waivers levy a recurring fee called an annual fee.
- Ensure that annual fees don’t outweigh the benefits you get as rewards, discounts, and waivers.
Advantages of a Fuel Surcharge Waiver
If you use a vehicle for the daily commute and use a credit card for refuelling, fuel surcharge waivers can become a saviour. You can get these benefits on fuel purchases:
Cost Effective
- If you use credit cards regularly at fuel pumps, surcharge waivers have a high potential for cost savings.
- It may significantly reduce or eliminate additional credit card costs.
- Certain fuel credit cards also offer bonus rewards on fuel purchases, which can further maximise your savings.
Convenience
- Using credit cards at fuel pumps can eliminate the need to carry cash and simplify the payment process.
- You can quit worrying about the hassle of paying change, which you generally require when you pay through cash.
- You can easily track expenses made through your credit card online or through a mobile credit card app.
Higher Fuel Efficiency
- Knowing that a waiver has got you covered, you can refuel more frequently.
- This can lead to better fuel management and better fuel efficiency for your vehicle over a longer term.
Look for a credit card online that provides higher offers and a surcharge waiver on fuel purchases if you are on road trips frequently. If you want a 100% fuel surcharge waiver to avoid paying additional costs, get the One Credit Card.
Enjoy 1%* value-back on fuel purchases, 5X rewards on the top two spending categories and attractive offers on dining and shopping with this premium metal card. What’s more, you get to control all aspects of your credit card spending using its powerful application. Apply now to reap these benefits!
*Offers may vary with time. Please check your One Credit Card app for the latest information.