Petrol prices in India seem to be on an upward spiral, with costs crossing ₹100 per litre in many cities. This rise in fuel costs can take a toll on your monthly budget.
However, petrol credit cards allow you to get rewards and discounts on fuel purchases, helping mitigate costs. This article looks at how petrol credit cards work and their benefits.
What Are Petrol Credit Cards?
A petrol credit card is a type of credit card that offers rewards on purchases made at fuel stations. The rewards usually include discounts on the per-litre rate or cashback on the total purchase amount. Most petrol credit cards only provide rewards on fuel purchases, while some offer rewards on other categories.
To earn rewards, you need to use your petrol credit card to pay for fuel at petrol pumps, which accept credit cards. The discount or cashback will be reflected in your credit card statement. The savings can range from 0.75% to 2.5% on fuel purchases. Some cards have caps on the maximum discounts you can earn monthly or yearly.
How Do Petrol Credit Cards Work?
The issuers of petrol credit cards have tie-ups with oil marketing companies like Indian Oil, Bharat Petroleum, and Hindustan Petroleum.
The transactions are routed through the bank when you use the co-branded credit card on fuel purchases at select petrol pumps.
The oil company then provides a discounted rate to the bank as per the agreement. This discount is passed on to you in the form of rewards.
For instance, if the petrol rate is ₹100 per litre and your petrol credit card offers a 2% discount, you will receive a discount of ₹2 per litre. So you end up paying only ₹98 per litre.
The discount amount may also be provided as cashback on achieving a certain spending threshold. Always read the offer terms to understand the reward structure.
Benefits of Using Petrol Credit Cards
Using a petrol credit card can benefit you in the following ways:
- Save on rising fuel costs – The discounts will help partially offset the continuously increasing petrol and diesel rates. Depending on your monthly fuel usage, the savings can be significant.
- No need to pay the full amount immediately – A petrol credit card allows you to pay for fuel purchases later and gives you interest-free credit for up to 50 days. This can help manage cash flows better.
- Get additional benefits – Many petrol credit cards include accelerated reward points, buy 1 get 1 movie tickets, etc. Some may offer dining or grocery rewards, too.
- Builds your credit – Using and repaying a credit card helps establish a good credit score. This can help in availing future loans at better terms.
- Enhanced security – Credit cards reduce the need to carry cash while travelling and provide dispute resolution mechanisms in case of fraudulent transactions.
Factors to Consider When Choosing a Petrol Credit Card
If you drive frequently and spend a sizeable amount on fuel, getting a petrol card can help reduce costs.
However, ensure you pick the right card by assessing factors like:
- Fuel purchase requirement – Some cards require you to spend a minimum amount on fuel monthly or annually to be eligible for rewards. Choose as per your usage.
- Acceptance – Check if the card is acceptable at fuel stations along your regular commute. Limited acceptance will reduce reward earnings.
- Reward rate – Compare cards to find higher discounts or cashbacks on fuel. Also, see if there are any caps on earnings.
- Flexibility – Many cards restrict rewards to only fuel purchases. Opt for ones that offer rewards on other spends, too.
- Fees – Avoid cards with high annual, renewal or late payment fees, as this will negate rewards.
How to Apply for Credit Card and Choose the Best Petrol Credit Card in India
Here are some tips to apply for and choose the most suitable petrol credit card in India:
- Check your eligibility – Most banks have a simple eligibility calculator to check if you can get a credit card based on factors like income, credit score, company, etc.
- Apply online – It is quick and convenient to apply online for credit cards on bank websites or portals like Paisabazaar. Upload the required documents.
- Consider add-on cards – Many banks allow authorised users to share the credit limit and earn combined rewards. This can be useful for family members.
- Read application T&C – Carefully read the detailed terms, applicable charges, interest rates, etc. before signing the application.
- Wait for approval – Approval can take 2-3 weeks. Reach out to the bank for application status updates.
Petrol credit cards are a smart way to save on the rising fuel costs in India. Choosing the right credit card per your spending pattern and usage can help alleviate the burden of increasing petrol prices. Compare rewards across cards and read the fine print before applying.
Use the card sensibly, make timely repayments and enjoy the fuel discounts. With petrol prices rising, a petrol credit card is valuable to your wallet.