Understanding Credit Card Convenience Fees: What Are They?

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Credit cards have become an indispensable tool for making payments. Whether shopping online, booking flight tickets, or paying for everyday expenses, people now understand how to check credit card balance and manage the card properly for convenience and rewards.


You might have noticed that some merchants impose an additional “credit card convenience fee” when you use your credit card for payment. This article aims to shed light on credit card convenience fees, explaining why lenders charge them and how they impact Indian consumers.

What Are Credit Card Convenience Fees?


Credit card convenience fees are extra charges businesses pay when customers use credit cards instead of cash or debit cards, generally the common payment method. The convenience fee typically represents a fixed percentage of the total sales made during the transaction.


Businesses implement this fee because credit card issuers and payment processing platforms take a small percentage of each transaction as processing fees. If you don’t know how to check credit card balance check and how these fees work, you can refer to your monthly statement for a clear view or directly contact the bank.

Why Are Credit Card Convenience Fees Charged?


The convenience fee serves as a means for payment platforms to cover the maintenance costs associated with their digital payment infrastructure. Although it might seem unfair to customers, the idea behind charging this fee is to offer an alternative payment method while recuperating the costs incurred for online transactions.


The convenience fee is non-refundable. Customers returning a product purchased online are refunded the product’s price. They do not get a refund on the fee. In some cases, this fee could be the primary source of income for online platforms after your approval for credit card eligibility.


Is Convenience Fee Legal in India?


The Government of India has been promoting digital payments and discourages the imposition of any additional charges when customers use online payment terminals. According to the Guidelines on Regulation of Payment Aggregators and Payment Gateways (updated on 17th November 2020), payment platforms must display any additional charges, such as convenience or handling fees, levied upfront.


As long as the convenience fee is mentioned in the payment platform’s terms and conditions and communicated to customers during the point of sale, it is considered legal. Any attempt to hide or mask such additional charges is deemed unlawful.


Convenience Fee Charges for Different Platforms


Convenience fees vary across different platforms in India. Let’s take a look at some popular platforms and their convenience fee charges:


IRCTC: The convenience fee for ticket booking on IRCTC is Rs. 15 plus GST for non-AC tickets and Rs. 30 plus GST for AC tickets. Customers pay through Unified Payments Interface (UPI) or Bharat Interface for Money (BHIM) pay less charges.


Paytm: Paytm charges a 2% convenience fee when users add balance to their wallets via credit cards. Customers using UPI or a debit card for wallet top-ups get a fee waiver. Paytm justifies this fee by covering banks’ charges for loading funds into the Paytm Wallet.


Petrol Pumps: Many Indian petrol pumps charge a convenience fee of 1% when customers pay for fuel using a credit card. Some credit card offers benefits such as a fuel surcharge waiver, allowing users to avoid paying these additional fees.


BookMyShow: The popular movie ticket booking app, BookMyShow, charges Rs. 19.82 as an internet handling fee. This fee helps efficiently cover the expenses of maintaining the app’s digital infrastructure.


Car Dealerships: When purchasing a car using a credit card, dealerships may levy a convenience fee of about 2-3% of the total amount. This fee covers the merchant’s transaction cost to the credit card company. The convenience charges can become substantial given the high value of car purchases.


It is worth noting that some e-commerce companies waived convenience fees or reduced them during the pandemic to alleviate the financial burden on customers and stimulate sales.


Also Read: What is the minimum salary required for credit card in India?




As digitalization continues, credit card have become a preferred payment method. While credit card convenience fees help businesses cover the costs associated with credit card payment processing, these charges can significantly impact customers, especially when making large purchases.


Understanding credit card eligibility and the convenience fee associated is crucial in evaluating whether it is worth paying the extra charges, considering the potential rewards and benefits your credit card provides. If you prefer to avoid these additional fees, consider alternative payment methods for specific transactions. Ultimately, being aware of credit card convenience fees allows you to make informed decisions while enjoying your credit card’s convenience and rewards.

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