Spend Smart. Fuel costs running high? Get a card

What is the one retail outfit you visit many times a month and spend regardless of price rise? A fuel station, of course. With petrol and diesel almost essential for most, expenditure on fuel ranks high in monthly bills.

You can’t do much about hike in petrol or diesel prices, but you can go for credit or debit cards that garner you some discounts or extra points specifically on this spending.

There are co-branded cards as well as regular cards that focus on fuel savings. These cards make petrol or diesel a bit easier on your pocket.

Co-branded credit cards involve the bank tying up with a specific oil company. Use of the card at that company’s fuel outlets nets you higher points, cash backs, free fuel, or a combination.

They also waive the fuel surcharge of 2.5 per cent that would otherwise be levied if payments are made through cards. So if you don’t mind staying faithful to a particular fuel provider and tot up hefty monthly fuel bills, co-branded cards are the way to go. Among the best are the Indian Oil-Citibank Platinum or Titanium cards.

On these cards, every ₹150 spent on fuel at Indian Oil outlets earns four points. Grocery and supermarket shopping earns 2 points for the same amount. Each point is worth ₹1 of fuel, working out to an approximate 2.6 per cent discount.

ICICI Bank has tied up with HPCL, and on these cards you have the trinity of cash-back, extra points and fuel surcharge waiver. But it caps the value of monthly transactions available for the waiver at ₹4,000 and the amount of cash back at ₹100 which dims the promise. Its rewards system for fuel-for-points works out to a discount of approximately 1.3 per cent.

The flip side to co-branded cards is that payment at a fuel station outside the partner network will carry the surcharge.

At other outlets, points will be accumulated at the normal rate, and not the special rate that applies for buying fuel at partner fuel outlets. Moreover, the card machine used should be that particular bank’s.

So if you find it hard to keep track of where an Indian Oil, BP or HP station is, go for credit or debit cards that waive the surcharge, giving you the freedom to stop and fill up anywhere. Some cards offer cash back on fuel bills, too. But use such cards only if you don’t spend heavily on filling up your gas tank.

This is because, for one, you will lose out on free fuel and extra points that co-branded cards offer, which can be quite substantial if your fuel consumption is high.

Second, surcharge waiver is applicable only within a range for many of these cards. For instance, on SBI’s Platinum card, surcharge waiver is capped at ₹250 per statement cycle, or a total monthly spend of ₹10,000. The minimum and maximum transaction values are at ₹500 and ₹4,000, respectively.

Standard Chartered’s Super Value Titatinum waives surcharge and gives cash back. It also offers 5 per cent cash back on utility and phone bills. All cash-back put together cannot cross ₹500 in each billing cycle, making ₹10,000 of total bill payment eligible for cash back.

Third, though you save on surcharge, your fuel spend will not give you any reward points. With Axis Bank’s Platinum cards, for instance, while surcharge is waived, the amount spent at the gas station will not qualify for its loyalty programme.

With the staggering range of cards there are, look at the additional benefits which most suit you, apart from fuel, to shortlist cards.

An avid shopper can go for cards that give higher points or cash back on fashion and supermarket outlets. An intrepid traveller can go for cards that can accumulate air miles.

Depending on where — shopping, dining out, watching movies and travel — you spend the most and frequently, choose your card to get the maximum bang for your buck.

COMMENT NOW