Fuel surcharge waiver is one of the most common features in credit cards. Almost every credit card in the market offers it. But, what is it and how is it calculated?
Fuel outlets generally have a transaction charge to partly offset the charges imposed by credit card issuers like Visa and Mastercard. This is called fuel surcharge and is passed on to the customers for using a credit card to pay for fuel. It can be up to 2.5% at some fuel pumps but typically it is around 1% in most metros and highway pumps. The minimum fuel surcharge is Rs 10. We are also charged 18% GST on this amount.
Here are some example to see how it is calculated:
Scenario 1
Cost of fuel: Rs 200
Fuel Surcharge: 1% which is Rs 2. But, we will get charged the minimum amount of Rs 10 as per the rules.
GST on fuel surcharge: Rs 1.8
Total charges to credit card: Rs 211.8
Scenario 2
Cost of fuel: Rs 2000
Fuel Surcharge: 1% which is 20
GST on fuel surcharge: Rs 3.6
Total charges to credit card: Rs 2023.6
Now, while many credit cards offer fuel surcharge waiver there are two things to keep in mind:
1. Maximum cap of fuel surcharge waiver per statement or calendar month - The amount of fuel surcharge waiver also has a cap and varies across credit cards. So, do keep it in mind when using the credit card for fuel.
2. Amount of fuel transactions eligible for waiver varies across issuers - It will have a lower range of say Rs 400 and upper range of Rs 4000. We get 1% fuel surcharge waiver only if the fuel transaction is between these amounts.
Fuel outlets generally have a transaction charge to partly offset the charges imposed by credit card issuers like Visa and Mastercard. This is called fuel surcharge and is passed on to the customers for using a credit card to pay for fuel. It can be up to 2.5% at some fuel pumps but typically it is around 1% in most metros and highway pumps. The minimum fuel surcharge is Rs 10. We are also charged 18% GST on this amount.
Here are some example to see how it is calculated:
Scenario 1
Cost of fuel: Rs 200
Fuel Surcharge: 1% which is Rs 2. But, we will get charged the minimum amount of Rs 10 as per the rules.
GST on fuel surcharge: Rs 1.8
Total charges to credit card: Rs 211.8
Scenario 2
Cost of fuel: Rs 2000
Fuel Surcharge: 1% which is 20
GST on fuel surcharge: Rs 3.6
Total charges to credit card: Rs 2023.6
Now, while many credit cards offer fuel surcharge waiver there are two things to keep in mind:
1. Maximum cap of fuel surcharge waiver per statement or calendar month - The amount of fuel surcharge waiver also has a cap and varies across credit cards. So, do keep it in mind when using the credit card for fuel.
2. Amount of fuel transactions eligible for waiver varies across issuers - It will have a lower range of say Rs 400 and upper range of Rs 4000. We get 1% fuel surcharge waiver only if the fuel transaction is between these amounts.
