- By Aditya Pratap Singh
- Wed, 03 Apr 2024 06:10 PM (IST)
- Source:JND
Surcharge On Bill Payment Through Credit Card: Customers having credit cards from Yes Bank and IDFC First Bank will have to pay a surcharge while paying utility bills. Both banks have decided to impose a surcharge on the payment of utility bills through credit cards. The new rule will come into effect from May 1. Bill payments for Telecommunications, electricity, gas, water, internet services, and cable services through the credit cards of both banks will attract surcharge of 1 percent beyond the limit. Earlier, many banks had stopped providing reward points on utility bills, insurance, and rent payments.
Surcharge on utility bill payment beyond a limit
Banks have shifted their focus to increasing revenue through credit cards. Yes Bank will charge a 1 percent surcharge and GST on bills totaling more than Rs 15,000 paid through credit cards. However, there will be no surcharge on payment through Yes Bank Private Credit Card. But, if the bill payment amount exceeds Rs 15,000, a surcharge of 1 percent and 18 percent GST will be charged on the additional amount. This rule will be applicable on every statement cycle.
The rule for a surcharge on bill payment
IDFC First Bank has said that it will charge a 1 percent surcharge and 18 percent GST if the utility bill payment through a credit card exceeds Rs 20,000. However, this rule of utility surcharge will not apply to FIRST Private Credit Card, LIC Classic Credit Card, and LIC Select Credit Card. This rule will be applicable on every statement cycle.
Banks tightened rules for low-margin business
Credit card is a low-margin business category for banks. Therefore, it should not be surprising if other banks also impose a surcharge on utility bill payments. Low-margin business category means that banks earn very low margins on revenue in this segment.