Do you know what actually is a Fuel surcharge while using your credit card for paying at the fuel station? Traders allow credit cards depending upon the proposition that the credit card providing corporations will route their customers to buy at the particular trader’s spot. To encourage his sale, the traders pay a small fee that is actually 1 to 2 % of the purchase made by the customer at a particular place. Now here the trader gets the sum from the bank or the credit card provider for the payments made at the fuelling station using the credit card. The amount they get in their accounts is after the deduction of the transaction fees. A transaction charge is an amount you are charged with for the facility to use your credit card, be it online or offline. Recommended: Top 6 LIC Policies To Invest in 2019
What Is Petrol Surcharge Waiver On Credit Card?
In the case of the transaction fees, the fuel industry works differently. Nonetheless, in India, oil selling corporations are not entitled to pay this charge, but it is the customer that bank actually charges this from in the form of a surcharge that is also called the convenience fee. Some companies provide credit cards with the benefit of the surcharge waiver and which can be seen in your monthly bills as a ‘fuel surcharge waiver’ up to a certain percent. This charge is merely around 2%-3%. It is transferred to the fuel agency that is the same amount that you pay during the transactions at petrol pumps as per its agreement with the bank. Important Points you need to keep in mind about the Petrol Surcharge Waiver on Credit Card.
In most of the cases, 1% to 3% of the transaction amount is considered as the surcharge. The amount of the transaction should range between Rs 400 to Rs. 4000 to avail the Petrol Surcharge Waiver. Every bank has a predetermined amount specified that you could get a surcharge waiver for. It is important to understand that the Fuel surcharge waiver nowhere means you need to pay less to get the fuel. It just happens to eliminate the extra charge if you use your credit card and saves you from the transactional fees.
How is Card Transaction Charge related to Fuel surcharge It might have come to your mind that why in case of transactions at petrol pumps using your credit card, the transaction charge is passed to the customer? The reason for this is that the Petrol pump operates in an extremely low-profit margin, this type of business if started accepting the transaction charge will completely be at their loss as this would impact their profit margins. Thus in this circumstance, the customer has to pay the transaction charge as the surcharge so that the fuel station can earn 100% of what is being paid by the customer. So by now, the idea of the surcharge must be clear to you. It is nothing but the transaction charge of 2.5% that you pay in extension to the actual fuel charge is called fuel surcharge. This charge can be a little more because of the service tax is also being imposed on the surcharge. For instance, If you use your credit card to get the fuel of worth Rs.1000, the actual amount you would be paying is: Rs.1500+ Fuel Surcharge + Service Tax on surcharge Rs.1500 + Rs.37.5 + Rs.5.63 = Rs.1543.13 Fuel Surcharge Waiver on Credit Cards There exist many credit cards in the market who claim that using their company’s credit card would give you the advantage of fuel surcharge waiver. The fact these companies hide that the waiver doesn’t include the Service tax that adds on to the Surcharge as mentioned above in the formula Amount X+ Fuel Surcharge + Service Tax on surcharge. (Here X refers to the fuel amount you purchase).
Do you know credit cards can help you save big on fuel?
Down below is a list of banks and their schemes regarding the petrol surcharge waiver for your reference: Recommended: Citibank PremierMiles Credit Card Review
