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ICICI Bank Credit Card users will Now have to Pay 1% Fee for THIS Service: See Details

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Over 11 million Indian credit card holders are served by ICICI Bank. The bank now charges 1% for rent payments made with credit cards. This may add to the credit card holders’ burden.

The bank sent a message to customers saying, “Dear Customer, beginning 20-Oct-22 all transactions on your ICICI Bank credit card towards rent payment will be subject to a 1% fee.”

ICICI Bank is now the first bank to impose a fee on rent payments made with credit cards.

Rent payment using credit cards

Many third-party platforms, such as RedGiraffe and Mygate, Cred, Paytm, Cred, Paytm, Magicbricks, allow tenants (tenants) the ability to pay rent with their credit cards.

They do charge a service fee. The platform allows users to input their credit card details, then they can go to the rent payment option.

Fill in details such as name, bank account number or the IFSC code, and then pay the required amount.

What will this mean for credit card holders?

Let’s say you rent a flat at Rs 12,000 per month and pay it with your credit card. The platform that facilitates the payment will charge you between 0.4% and 2.5%.

Let’s say that the platform charges Rs 12,000 per month for the transaction. The amount that will be taken from your credit card is Rs 12,120.

Now when your bill is generated, ICICI Bank will levy a 1 per cent transaction fee (Rs 12,120).

This means that you will have to pay Rs 12,241 back to the bank. In this instance, the ICICI Bank credit card holder will be charged an additional Rs 1,452 annually.

Why is this charge?

Experts in financial services say that although there are many platforms that allow rent payments to be made using credit cards, there is no way to verify the legitimacy of the landlord (except RedGiraffe).

Cardholders may misuse the service by making payments to friends or relatives using the credit card.

They can also add them as landlords to convert the cash payment into cash. This allows cash withdrawals from credit cards to be made without paying higher fees.

Cash withdrawals made from ATMs with credit cards are subject to a 2.5-3% bank charge.

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