The Hindu Business Line : A new card from American Express

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A new card from American Express

Shanthi Venkataraman

At the launch of American Express-ICICI Lombard and Hindustan Petroleum credit card, in Mumbai. — Shashi Ashiwal

IS THE prospect of rising petrol prices making you consider walking to work? Relax. There are options out there to ease the pressure on your wallet.

The latest card from American Express promises to save you up to 10 per cent on fuel expenses. That's not all. It also packs in a cashless insurance feature, not to mention the option of paying your motor insurance premium in instalments. Of course, all this comes at a steep annual fee of Rs 2,000. What's more, you must have a gross taxable income of Rs 4 lakh to avail yourself of the card.

RPM — Rewards, points and more

The credit card comes with all the regular features. The interest rate on the card is 2.79 per cent per month, which is slightly lower than the 2.95 per cent charged by most other cards. Any spends above Rs 3,000 can be converted into a loan at 1.49 per cent per month. The card is issued in association with HPCL and ICICI Lombard. If you choose to tank up at HPCL outlets and pay by this credit card, you could save on your fuel expenses.

The card waives the surcharge of 2.5 per cent that is normally charged on other cards. Some loyalty cards tend to specify a minimum amount of fuel purchase. In this case, there is no such restriction.

The rest of the savings, which the bank claims can be up to 10 per cent, comes from the accumulation of reward points. The reward point programme is quite elaborate: 1,250 reward points can be exchanged for a fuel voucher worth Rs 250.

For fuel purchases below Rs 750, you earn 1.25 reward points for every Rs 100 spent. For purchases above Rs 750, you get 2.5 reward points for every Rs 100 spent. You can also accumulate reward points quickly by paying your utility bills through the card. In that case, you get 50 per cent more reward points on your spends. Besides, free fuel, you can also redeem your points for gifts, dinners and the like.

Cashless motor insurance

This feature is useful only to ICICI Lombard policyholders. The card-holders can choose to pay their motor insurance premium in interest-free instalments over a three, six, nine or 12 months.

If you repair your vehicle at any one of the 480 garages that ICICI Lombard has tie-ups with , you can just submit your documents and let the insurance agency take care of the expenses.

This saves you the hassle of claiming re-imbursements for your expenses from the agency.

Suitability

If you have an insurance policy with ICICI Lombard, this may be a good option. If you don't, then the main advantage of the card would be the saving on fuel. There are however, several other petro-and co-branded cards that help save fuel expenses at specific petrol stations. Petro-cards automatically waive surcharge and typically involve a one-time charge. These may be worth evaluating, especially given the steep annual fee of Rs 2,000 on this card.

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