How To Choose A Credit Card That Will Help You Maximise Your Fuel Savings

Petrol and diesel are getting expensive day by day. Especially in India, the price of fuel keeps fluctuating due to global oil prices, the value of the US Dollar, excise duty, and many other factors. We have seen commoners opting for an alternative mode of transport every day due to the hike in fuel prices. Did you know that you can use your credit card and save big on your fuel bills?

Many credit card companies offer cards with attractive features which help you minimize your fuel expenses. If you are someone who is looking for ways to cut down on your fuel bills, check if your credit card has the following features.

Factors To Consider Before Swiping Your Credit Card For Your Fuel Bills

• No annual fees: When you choose a credit card with an objective to save on your fuel bills, make sure you pick a card that does not charge you an annual fee. If you have a credit card that charges you a high annual fee and gives you a small discount on your fuel bills, it is not worth it. Sit down and compare the features and benefits of your card and swipe it for your fuel bills only if it is profitable for you. If you are yet to apply for a credit card, choose one with low or nil annual fees.

• Fuel surcharge waiver: When you use your credit card to pay your fuel bill, the bank will usually charge you a surcharge of 2.5% on your total bill amount. Most credit card companies offer fuel surcharge waiver feature which waives this surcharge for you to help you minimize your fuel expenses. Please check if your credit card has this feature. If it does, make use of this benefit. Please note that few credit cards replace the fuel surcharge with a 1% convenience fee. If your credit card does not offer this feature, you might want to consider choosing a credit card which offers this benefit.

• Usability: Few credit cards that are available in the market offer an attractive discount at selected fuel stations. Please ensure that your card covers all fuel stations and you can avail the benefits irrespective of the oil station you choose to fuel your vehicle. It is highly impossible to visit a specific fuel station all the time to avail of the benefit your card has to offer.

• Reward points: Most credit cards in India have an excellent reward point program wherein cardholders are rewarded with points based on their spends. Choose a credit card that offers reward points on your fuel bills. You can redeem these reward points to shop on suggested products. This way, you not only save on your fuel bills but get to use your reward points to buy a product you like. 

• Cashback offers: Few credit cards offer cashback on your fuel spends. This cashback is obtained as points and you can redeem these points to buy products suggested by the credit card provider. Try and choose a credit card that offers high cashback on your fuel spends.

• Interest rates: Please be aware that credit card providers charge a high-interest rate on the balance due amount. While the interest rate charged on credit cards are usually high, you might find few cards that levy a lower interest rate. High interest rate on your credit card can easily make you fall into a debt trap. Few banks offer a low interest rate on their credit cards for a short period of time as a part of their promotional activities. You can opt for a card during this time and enjoy the benefits. It is not advisable to choose a credit card that gives a great discount on your fuel bills but charges you a high interest rate.

• Minimum spend limit: Most credit card providers allow you to redeem your reward points or utilize your discount vouchers only when you have spent a certain amount set by them. It is not advisable to choose a card that encourages you to spend more to avail of a small discount. When trying to minimize your fuel expenses using your credit card, make sure you choose a card that does not have a minimum spend limit to avail the benefit.

The bottom line

When wisely used, credit cards are beneficial. However, if you are not a financially-disciplined person, you might want to think twice before you swipe your card. Take time to understand the features and benefits of your card before using it to charge your fuel bills.