Credit cards: How does fuel surcharge waiver work at petrol pumps? Check details

Do you indulge in a lot of work-related travel in your conveyance? Or are you a travel freak who loves to go on long drives on national highways? If one of this is true in your case then perhaps you spend a lot of money at petrol pumps, and may possess one of those fuel credit cards.

If you have not yet noticed then most of these fuel specific credit cards waive off fuel surcharge. So, this prompts us to define what exactly is fuel surcharge that is typically waived off by these credit card companies.

What is fuel surcharge?

It is a fee that the credit card companies charge from their customers for transactions made at petrol pumps. It is usually a tiny fee that is charged as a percentage of the total fuel bill and typically ranges between 1 to 2 percent of the total bill.

When the credit card company or the bank happens to waive off the fuel surcharge, it means the extra charge that you would have had to pay for using the credit card would no longer be applicable.

Let us understand more on this.

Fuel surcharge waiver

Fuel surcharge waiver is applicable in some cases only. For instance, some credit cards stipulate that the waiver would be given only at the fuel pumps maintained by a particular oil company.

Additionally, this waiver may be applicable only when the amount of transaction falls within a range.

I. Fuel pumps: As mentioned earlier, some credit card companies stipulate that the fuel surcharge waiver would kick in only when the transaction is done at certain fuel pumps. For instance, Indian Oil Kotak credit card gives the fuel surcharge waiver only at Indian Oil outlets.

II. Minimum and maximum limits: Another key factor that the card users should be mindful of is that fuel surcharge waiver kicks in when the transaction is above a threshold and upto a certain limit.

For instance, Indian Oil HDFC Bank Credit Card offers 1 percent waiver only on minimum transaction of ₹400 and upto ₹250 per cycle (as on Sept 22, 2024).

III. Annual fee: One more key factor that credit card users need to be aware of is that there is an annual fee that these credit cards levy. So, in order to avail fuel surcharge waiver, you should not opt for the cards that levy a high annual fee. Additionally, some of the fuel credit cards also give free petrol, albeit upto a few litres in a time range. 

This also compensates for the cost incurred towards fuel surcharge while using a fuel specific credit card. For instance, Indian Oil HDFC Bank Credit Card offers upto 50 litres of free fuel in a year. 

For each transaction at a fuel pump, card users are entitled to earn fuel points which can later be redeemed to earn free petrol subject to an upper limit.