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Credit Cards Utility Usage Charges & Rewards Updates

14 August 2025 0

Credit Card Surcharge on Utility Payments: All You Need to Know

In recent months, several banks in India have started imposing 1% surcharges for utility transactions made via credit cards, alongside 18% GST. These changes, which impact transactions such as mobile recharges, electricity bill payments, and water bills, reflect the evolving landscape of credit card usage policies. Here’s a detailed guide to help you understand the recent updates, limits, and charges across major banks.

What Are Utility Payments?

Utility payments include essential services such as electricity bills, mobile recharges, gas bills, and water bills. These transactions are categorized under Merchant Category Code (MCC) 4900 by payment networks. While convenient, utility payments via credit cards are now subject to limits and surcharges if those limits are exceeded.

New Credit Card Utility Surcharge Rules

Effective dates and conditions for the utility surcharge vary across banks. Below is an overview of the updated limits and charges for utility payments via credit cards:

Banks and Their Utility Usage Limits

Below is a list of major banks and their maximum permitted amounts for utility payments before incurring a surcharge: If credit cards are used above this given limit, customer will have to bear 1.18% charges for utility payments.

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Credit Cards Utility Charges Official Notifications:

Kotak Bank Credit Card official Terms & Conditions – Click here

Axis Bank Credit Card - 20 Nov 2024

Effective 20th December 2024

• Interest charges will be revised to 3.75% per month.
• The auto debit reversal or cheque return fee will be 2% of the payment amount, with a minimum fee of INR 500 and no maximum cap on the fee.
• The fee for cash payments at branches will be revised to INR 175.
• The current late payment fee structure continues to apply. An additional INR 100 charge will be levied if the ‘Minimum Amount Due (MAD)’ is not paid for two consecutive cycles and will apply until the MAD is cleared.
• Dynamic Currency Conversion (DCC) markup will be revised to 1.5%.
• Rent transactions will incur a 1% transaction fee with the cap of INR 1,500 removed.
• A transaction fee of 1% will be applicable on education payments made via third-party apps. However, payments and transactions made directly through education institutional websites or their POS machines will not incur this fees.
• Cumulative spends exceeding INR 10,000 on wallet loads, INR 50,000 on fuel, INR 25,000 on utilities, and INR 10,000 on online skill-based gaming platforms within a statement period will attract a 1% transaction fee.
• Government services MCCs 9222, 9311, and 9402 will also be added to no cashback category.

All the above-mentioned fees are subject to GST as per government regulations.
Always open to help you.
Regards,
Axis Bank Ltd.

ICICI Bank Credit Card - 10 Oct 2024

Dear Card Holder, This is to notify you regarding the upcoming changes to your card features and charges, effective from Nov 15, 2024: Rewards and Benefits • You will continue to earn reward points on utility spends up to  40,000, insurance spends up to  40,000 and grocery & departmental store spends up to  20,000 per month, at the current earn rate. • You will continue to enjoy fuel surcharge waiver on fuel spends up to  50,000 per month. Surcharge waiver will not be applicable for spends beyond this limit. Spend Threshold Criteria • The spend threshold for annual fee reversal and milestone benefits will exclude payments made towards rent, government and education, through your Credit Card. Fees & Charges • No fee will be charged for payments made directly to a school or college, including payments towards international education, using your Credit Card. However, a fee of 1% of the transaction amount will be charged for payments made towards education, through third party apps. • A fee of 1% of the transaction amount will be charged for utility transactions exceeding  50,000 and for fuel transactions exceeding  10,000. • Supplementary Cardholders will enjoy enhanced benefits by paying an annual fee of  199, which will reflect in the statement issued during the card anniversary month. • Finance charges for the revolving credit facility on retail transactions and cash advances will be revised to 3.75% per month (45% per annum). • Late payment charges will be revised according to the new structure. Outstanding Amount Late Payment Charge <=  100 Nil Between  101 –  500  100 Between  501 –  1,000  500 Between  1,001 –  5,000  600 Between  5,001 –  10,000  750 Between  10,001 –  25,000  900 Between  25,001 –  50,000  1,100 >  50,000  1,300 Additionally, starting Nov 15, 2024: • You can enjoy complimentary airport lounge access by spending  75,000 in the preceding calendar quarter. Spends made in the preceding calendar quarter will unlock access for the subsequent calendar quarter. To be eligible for the complimentary airport lounge access in the Jan-Feb-Mar, 2025 quarter, you need to spend a minimum of  75,000 in the Oct-Nov-Dec, 2024 quarter and similarly for the following quarters. Please refer to the Most Important Terms & Conditions for more details . Transaction categories Category Merchant Category Code (MCC) Utility 4899, 4900, 4901, 3887 Insurance 5960, 6300, 6381, 6399 Grocery & Departmental Store 3333, 5411, 5412, 5441, 9751, 5311, 5331, 5499 Rent 7014, 7407, 5271, 6513 Government 6760, 9222, 9211, 9399, 9402, 9405 Fuel 1361, 3851, 5172, 5541, 5542, 5983, 9752, 5555 Education 8211, 8220, 8241, 8244, 8249, 8299, 8493, 8494, 7911

Reward Points Updates:

Reward Points Updates Official Notifications:

Tips to Avoid Credit Card Utility Surcharges

1. Monitor Spending: Track your utility payments to ensure they remain within the bank’s defined limit.
2. Split Transactions: If allowed, divide payments into smaller amounts across billing cycles or multiple cards.
3. Use Alternatives: Opt for net banking or UPI payments to avoid these surcharges.
4. Understand MCC Codes: Check if the merchant’s MCC is applicable for charges.

These updates mark a shift in how utility payments are treated in the credit card ecosystem. Understanding these changes and planning accordingly can help you avoid unnecessary fees while maintaining your financial flexibility.

Stay informed to ensure smarter financial decisions. For further details, refer to your bank’s official communication or contact customer support.