Rent payments form a huge chunk of monthly expenses for salaried professionals in metro cities such as Mumbai or Delhi. Sometimes an unexpected purchase, medical bill or a cash crunch can throw your rent payments off schedule. This is when credit cards come in handy to make sure that such monthly payments go through swiftly without a delay. But if you’re using an ICICI customer, this convenience is going to cost more, since the bank is charging a fee on rent paid through credit cards.
Cost of convenience
The bank, which has almost a crore active credit cards being used in India, has informed consumers about this additional 1 per cent levy through text messages. This will be applicable on rent paid through payment apps such as Cred, RedGiraffe, Mygate and Paytm, among others. This is the first time that any bank has introduced such charges specifically for rent paid using credit cards.
Benefits of using payment apps
Using credit cards for such transactions has its perks, since scheduling regular payments reduces the chances of a delay. Frequently making big purchases from a credit card, and paying its bill on time, can be a convenient way to increase credit score for securing loans in future. Reward points collected on the rent payment, can also fetch discounts and other benefits through the credit card.
ICICI’s fee will be an addition to the convenience charge levied by payment platforms on rent payments, which can be anything between 0.5 per cent to 2.36 per cent. The bank hasn’t mentioned any specific reason for the move, but it might be meant for preventing credit rotation.
Since cash withdrawals from ATMs using credit cards come with a 3 per cent charge, people list their friends or family members as landlords on apps, to turn funds into cash without the additional fee.