Impact of the Fuel Credit Card on Your Credit Score

With the rising fuel prices and so as its consumption can be an expensive deal for many people. At this time fuel credit cards look like a savior for people whose fuel purchases are regular. While the cards offer a certain percentage of fuel surcharge waiver per month, there are some other cards as well that are specifically designed to help you save in form of cashback, accelerated rewarding points, co-branded benefits, and much more.

Fuel credit cards are offered by banks to provide more benefits while purchasing fuel. This card is seemingly more profitable for those who constantly purchase fuel. This card can help lower the expenditure on fuel and can also get many benefits concerning lifestyle.

Regardless of the benefits a fuel credit card is still a credit card and it also impacts your credit card score as well. It also has its pros and cons. The fuel credit cards are impactful when it comes to fuel and can save you a lot while at it but yes it can be a double edge sword as well just like the other credit cards.


Ways a fuel credit card can impact your credit score

Timely bill payment –

When you pay your bills on time, this makes your image as a responsible person in front of your card issuer. Not only that but it can also make a positive impact on your credit score.

Low Card utilization –

When you keep your utilization rate for the fuel credit card lower than 30% of the card limit, this makes your utilization rate low. This is a very impactful way of keeping your credit score in very good condition.

Full bill cover –

When you cover your bill in full, that means if your bill is Rs 10000 and you pay the same amount for your credit card, then your bill is covered fully. This directly imprints as a positive action in your credit history.

Late bill payments –

A fuel credit card just like a normal credit card charges you after your purchase for your expenses. These purchases are to be paid for either monthly or in full once. How you want to do it is totally on you. However, if you make your payments late, there will be interest rates applied to your outstanding amount. And late bill payments will impact your CIBIL score as well.

Clearing Minimum Dues Only –

You should clear your bill in full, clearing minimum dues only will leave an outstanding amount in your bill which will be paid with increased interest rates in it. Not only you will pay more money in the end but it will also impact your CIBIL score. But if you are paying the amount below your minimum due balance your credit score will be dragged down with it.

Over Limit usage –

Just like any other credit card, fuel credit cards also have a limit. If you go over that limit continuously, then your credit score will suffer. So rather than using more than your credit card limit, you should go ahead and increase your credit card limit.

Cash Advance –

Although fuel credit cards can be used for cash advances, they charge an interest rate on the amount from the moment the money was withdrawn. This also impacts the civil score negatively. Fuel credit cards are issued for the sole purpose of fuel purchases, but yes if you use the card for cash withdrawal you will have to pay the charges for it.

Benefits or features of Fuel credit card

  1. Redeeming points on every fuel purchase is the most beneficial way where you can purchase fuel with the point. This can be translated as free fuel or if you want to use the points differently you can always theme it for the merchandise.
  2. Fuel Surcharge which is simply the difference between the cost of the fuel as quoted and the actual cost of the fuel at the time of shipment which is up to 2.5% can be waived off when you pay with your Fuel credit card.
  3. With a Fuel credit card you will also be eligible for a certain percentage of your expense to be returned as a cashback.
  4. There are always dining offers where the fuel credit card can take you out of the dining with your loved ones at the minimum cost or maybe no cost at all.
  5. There are some other benefits like waiver of annual fee, eligibility for telecom benefits, concierge services, and many more.

Here are some of the Fuel Credit cards and their features

IndianOil Citi Credit Card – Joining fee (Rs. 1000 + applicable charges )

  • 250 turbo points on card activation
  • 1 turbo point on every Rs 150 spent, 2 turbo points on every 150 spent on supermarket, and 4 Turbo points Rs. 150 spent on fuel.
  • Discounts on dining across several participating restaurants
  • Spend-based annual fee waiver

ICICI Bank HPCL Platinum Credit Card – Joining fee (Rs. 199 + plus applicable charges)

  • 2 reward points per Rs. 100 spent with the card
  • Rs. 100 on your movie ticket with BookMyShow.
  • Discounts on dining through the Culinary treats Programme
  • Spend-based annual fee waiver

Standard Charted Super Value Titanium Credit Card – Joining fee (Rs. 750 + plus applicable charges and NIL for premium banking customers)

  • Up to 1500 cashback on fuel purchases within the first 90 days
  • 5% cashback on fuel purchases, utility bill payments, and telephone bill payments.
  • 1 reward point on every Rs. 150 spent on other purchases
  • Complimentary Priority Pass membership
  • Spend-based annual fee waiver

Read More: How Credit Cards Can Maximise Savings During Rising Fuel Prices

Bottom Line

Fuel is a costly expense and depending on your need, if you purchase a lot of fuel for any reason, the Fuel credit card is a wise decision.
A fuel credit card does impact your credit score just like any other credit card. Just like any other card, there are parameters and responsibilities to hold a Fuel credit card and use it. However, how the fuel credit card impacts your score depends on you.

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