ICICI Bank to impose 1% charge on rent payments through credit card; find details here

Record symbol of an ICICI Bank department. Reuters

ICICI Bank has larger the weight on credit card holders by way of enforcing a brand new scheme. On Tuesday, the non-public sector lender notified its purchasers by the use of an SMS {that a} one according to cent charge could be carried out to any transactions made with their ICICI Bank credit card for the aim of paying rent.

This shall be acceptable from 20 October 2022. With this, it has develop into the primary financial institution to charge shoppers who pay their rent with credit playing cards. This charge has been presented to forestall credit rotation through bogus rent payments.

Reason why for this extra charge:

In accordance to business analysts, purchasers use third-party websites to upload their kin or buddies as landlords and ship price range to their financial institution accounts to flip them into money at no further expense. Whilst the usage of a credit card to generate profits withdrawals from ATMs, banks generally charge between 2.5 and three according to cent.

Rent will also be paid with credit playing cards on plenty of third-party websites, together with RedGiraffe, Mygate, Cred, Paytm, and Magicbricks, even though, they impose a undeniable processing charge.

Shoppers most effective want to input their credit card knowledge on the platform, choose the “Pay rent” choice, and input knowledge like their title, checking account quantity, IFSC code, or landlord’s UPI (Unified Payments Interface) deal with sooner than settling on the right cost manner.

Have an effect on on credit card holders:

If a client makes use of his credit card to pay Rs 15,000 in rent per thirty days, the platform that processes the cost will moreover charge him any place from 0.4 according to cent to 2 according to cent. The quantity that shall be debited from his credit card shall be Rs 15,150 if the platform fees 1 according to cent for the transaction. ICICI Bank will now upload its 1 according to cent transaction charge to the client’s invoice (Rs 15,150), making the entire quantity due to the financial institution about Rs 15,300. This means that on this example, the 1 according to cent levy will lead to an extra burden on ICICI Bank credit card holders of about Rs 1,812 according to 12 months.

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