The Hindu Business Line : For motorists... Filling fuel is now on the cards, literally

"Cash or card?" cashiers ask, regardless of whether you are at a pharmacy or a petrol pump. Payment options, such as petro and co-branded credit cards, have opened new avenues for motorists to settle up bills at filling stations. But convenience is not the only bait being offered to lure customers to sign up for these cards. There is the incentive of reward points as well.

But what are the attractions of the new payment options? And how does one choose between them? There are three basic options for those looking to use plastic to pay for fuel — petro cards, co-branded credit cards and plain vanilla credit cards.

Petro cards, best bargains for fuel purchases

To make you spend more and make you return to their retail outlets frequently is the "funda" behind the petro cards offered by BPCL and HPCL. The key benefit of using a petro card is that they do not attract any surcharge over and above the bill amount. Credit or debit cards usually levy a surcharge on the value of your bill.

The two major petro cards available are:

HP Smart 1, a pre-paid card, provides you with 5 per cent rewards on total spend at any Hindustan Petroleum retail outlet. All petrol/diesel fills, lubricants, servicing, and even your shopping bill at HP Speedmart Stores (convenience store) will be eligible for reward points, provided you use the HP Smart 1 card to pay for these services.

The BPCL Petro card provides you with reward points (called petro miles) for all purchases from any of Bharat Petroleum's 1,250 retail outlets in India. The reward points in BPCL's case differ based on what products are purchased.

Both these cards are available for a one time fees. The card once given has to be loaded with the amount ranging from Rs 500 and above. When the card is swiped for fuel, the card is debited with the bill amount.

Redemption of rewards

In the case of HP Smart 1, you can encash the rewards accumulated for free fuel. In the case of the BPCL Petro card, you can only redeem the petro miles for gifts. The petro miles can either be redeemed at BPCL outlets or through its Web site.

In the age of pre-paid usage, the convenience of petro cards provide an edge over other credit and debit cards. Though credit and debit cards can also be used for purchase of fuel, petro cards score on costs, ease of availability and annual fees.

Co-branded cards

Apart from the petro cards, you may also use a co-branded credit or debit card to pay for fuel. This provides the advantage of getting the surcharge waived, apart from doubling as a conventional debit/credit card. Co-branded debit/credit cards exempt the surcharge levied on the fuel — 2.75 per cent or Rs 10, whichever is higher.

The HPCL-ICICI Bank credit card and IOC-Citibank credit card are the standard options. The system of reward points and their redemption is similar to that available on credit/debit cards.

For instance, in the case of ICICI Bank- HPCL credit card, the reward points — Speed `o' miles — can be redeemed for free fuel at HPCL Petrol Pumps or against gifts available in the ICICI rewards redemption catalogue. There are also a couple of add-ons to this card. The cardholder can get a 15 per cent discount on P-U-C. (pollution under control) check, labour charges on servicing and minor repairs at HPCL petrol pumps, as also a 5 per cent discount on MRF tyres, Exide batteries and MICO accessories.

The IOC-Citibank card comes with a reward of one (turbo) point for every Rs 125 billed. Purchases of any other Indian Oil product apart from fuel at an Indian Oil retail outlet gives you two points. The accumulated points can be exchanged for free petrol or petro coupons. Petro coupons can be exchanged for free petrol/Servo lubricants at select IndianOil retail outlets.

But you may have to weigh a couple of factors before opting for a co-branded credit card instead of a petro-card:

You are saddled with an annual fee (for the debit/credit card). In the case of a petro card you only pay a one-time membership charge (non-refundable).

There may be a catch to the waiver of the surcharge. For instance, in the HPCL - ICICI Bank debit card, there is an extra charge of Rs 2 for all fuel purchase transactions that is less than Rs 400 made at HPCL outlets.

Plain vanilla credit cards

If you do not own a petro card or a co-branded card, which facilitates fuel purchases, you may be tempted to swipe your plain vanilla credit card at the petrol pump. The advantage of doing this is that you need not go in search of the retail outlet of a particular petrol company just because you that firm's card. Free insurance, balance transfer, revolving credit, global calling card are the other spicy add-ons that one gets depending on the credit card. But tread cautiously when you do this:

You may get a waiver of the petrol surcharge even on your plain vanilla credit card, even if the card is not a co-branded one. But this could be subject to a minimum bill value. For instance, the HSBC Silver/Gold cards d not attract surcharge on petrol, this is to induce more frequent usage of the credit card. But this waiver is subject to the purchase amount being between Rs 400 and Rs 2,500. Though this waiver is attractive, the service charges on the card can dent your pocket.

SBI corporate cardholders are eligible for the "Fill it up" scheme which provides waiver of the surcharge for purchases between Rs 400 and Rs 2,000 in select IOC and IBP outlets. However, service charges are applicable.

Cash can earn you rewards too...

IOC has a unique programme — IOC Xtra — that offers rewards for cash purchases of fuel. The reward points can be redeemed for IOC-manufactured fuel and lubricants. In addition, reward points can also earn you such gifts as electronics, vehicle accessories and travel tickets to several exotic destinations.

Which one is for you

Generally, one prefers to visit a specific retail outlet for fuelling. If you patronise any such outlet, then use the petro cards offered by that petrol company, rather than opting for cash purchases. You can earn points on the fuel payments with a small one-time deposit. This will help extract more mileage from your fuel purchases as you can use these rewards points for free fuel or gifts. However, if you do not have a fixed retail outlet where you fill up petrol, then you may find it inconvenient to tie yourself to one particular petro card. And will probably prefer to choose your method of payment (cash/ card/ petrocard).

If you are the kind of person who pays in cash by and large, go for the IOC Xtra programme. But this means that you get rewards only on fuelling from IOC outlets.

Do not sign up for a debit card just to fund your fuel purchases.

Credit card users can opt for the co-branded cards as they provide you the dual benefit of a standard credit card and fuel without surcharge.

Hence, for an average salaried person looking for payment options for his fuel purchases, it may be best to go in for a no-frills petro card or the IOC Xtra programme. So, the next time you fuel, you may just say to the attender "redeem my reward points".

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