ICICI Bank has announced several important updates to its credit card fees that will take effect from November 15, 2024. These changes include updates to finance charges, late payment fees, and transaction fees for education and fuel. The bank aims to align its charges with industry standards and manage rising operational costs. Here’s a detailed breakdown of what’s changing.
1. Finance Charges: Higher Interest Rates on Unpaid Balances
Starting from mid-November, ICICI Bank will apply a monthly finance charge of 3.75% on unpaid credit card balances and cash advances. This translates to an annual interest rate of 45%. The new rates mean that if cardholders don’t pay their full balance on time, interest will accumulate at this higher rate until the debt is cleared.
2. Late Payment Fees: Structured Based on Outstanding Balance
ICICI Bank is restructuring its late payment fees based on how much cardholders owe. Here’s the new fee structure:
- Outstanding balance below ₹100: No late payment fee.
- ₹101 to ₹500: ₹100 late payment fee.
- ₹501 to ₹5,000: ₹500 late payment fee.
- ₹5,001 to ₹10,000: ₹750 late payment fee.
- ₹10,001 to ₹25,000: ₹900 late payment fee.
- ₹25,001 to ₹50,000: ₹1,000 late payment fee.
- Over ₹50,000: ₹1,300 late payment fee.
This tiered system ensures that cardholders are charged according to their overdue amounts.
3. Educational Transactions: New Fees for Third-Party Payments
When it comes to education-related payments, there are some changes:
- Direct payments to schools and colleges, including international fees: No additional charges.
- Payments made via third-party apps: A 1% transaction fee will apply.
This fee on third-party payments helps the bank cover extra processing costs.
4. Utility and Fuel Transaction Fees: Charges for Higher Payments
ICICI Bank is introducing new fees for specific utility and fuel transactions:
- Utility bill payments over ₹50,000: A 1% fee will be applied.
- Fuel purchases above ₹10,000: A 1% fee will be charged.
These charges affect only higher-value transactions, so smaller payments remain unaffected.
5. Unchanged Fees and Additional Details
Certain fees will stay the same even after the changes:
- Cash payments at bank branches: The fee remains ₹100 per transaction.
- Fuel surcharges and fare payments: A 1% fee continues to apply, though discounts are available for Amazon Pay credit card users.
- Interest on unpaid balances and cash advances: Interest will be charged until the entire amount is paid off. The maximum interest rate for default cases remains 3.8% per month (46% annually).
What These Changes Mean for ICICI Credit Cardholders
These updates mean cardholders need to be aware of when and how fees might apply to their transactions. Paying off balances on time is more crucial than ever to avoid high finance charges and late payment fees. Cardholders making large utility or fuel transactions should also plan ahead to minimize additional costs.
How to Manage Credit Card Charges Effectively
To make the most of your ICICI Bank credit card while avoiding unnecessary fees:
- Pay your full balance on time to avoid finance charges.
- Set up reminders for due dates to avoid late payment fees.
- Use direct payment methods for education-related fees when possible.
- Monitor your high-value transactions in utilities and fuel to be aware of additional charges.
- Take advantage of discounts and offers available on specific credit cards, like the Amazon Pay ICICI Bank card.
Conclusion: Be Prepared for the Changes
These fee updates reflect the bank’s efforts to keep up with operational demands and industry trends. Being informed about these changes will help you manage your credit card wisely and avoid extra costs. Make sure to review your spending habits and adjust as needed to make the most out of your ICICI Bank credit card.