IDFC First Bank Credit Cards – Charges on Utility and Rental Payments

Known for its rewarding and lifetime free range of credit cards, IDFC First Bank has also joined the list of card issuers in India who are devaluing their credit card offerings. IDFC Bank has announced that it will be charging a surcharge of 1% on aggregate utility bill payments above Rs. 20,000. This decision follows in the footsteps of Yes Bank’s similar announcement. However, unlike Yes Bank’s move, which received criticism for its blanket charges on utility bill payments, IDFC’s decision appears to be more balanced.

The implementation of a 1% surcharge only on utility spends exceeding Rs. 20,000 is intended to discourage the misuse of consumer credit cards for large business transactions while still accommodating the typical utility expenses of customers. The spend threshold after which a charge shall be levied is unlikely to affect ordinary consumers, as their utility bill payments usually fall below this limit in a given month.

Here is a table explaining the new applicable surcharge on utility bill payments. 

Aggregate Utility Spends	Surcharge
Below ₹20,000 in a Statement Cycle	Nil
Above ₹20,000 in a Statement Cycle	1% + GST Surcharge on Aggregate Utility Transaction Value in a Statement Cycle

The following MCCs are considered for utility spends.

• MCC 4814: Telecommunications
• MCC 4900: Electric, Gas, Water
• MCC 4816: Computer Network
• MCC 4899: Cab and Other Television Services

Apart from a charge on utility bills, there shall also be a change in the rent fee, which is applicable to IDFC credit cards. Earlier, customers would have been charged 1% + GST for rental payments, but now it is either 1% or a minimum of Rs. 249 per rental transaction.

Are all IDFC Credit Cards affected by these changes?

Not all IDFC Credit Cards are affected by these changes. The Minimum Rent & Property Management fee of Rs. 249 and Utility Surcharge are not applicable on FIRST Private Credit Card, LIC Classic Credit Card, and LIC Select Credit Card.

Bottom Line

In a move mirroring Yes Bank’s recent announcement, IDFC First Bank credit cards shall now charge a 1% + GST charges on utility bill payments exceeding Rs. 20,000. This decision, while devaluing IDFC credit cards, is seen as a balanced and reasonable approach compared to Yes Bank’s broad implementation. Because most users would have utility spends below or equal to Rs. 20,000.

It is also important to inform those who use IDFC First Bank credit cards for rental payments (MCC 6513) that there has also been a change in the rent and property management fee. Going forward, customers will be charged a minimum of Rs. 249 or 1% + GST on rental payments.