A big decision has been taken in the GST Council meeting regarding debit and credit card transactions. According to information received by CNBC Awaaz from sources, now 18% GST will be levied on credit card and debit card transactions below Rs 2000. Payment gateways will not get any exemption in this.

After this decision, 18% GST will be levied on the merchant fee of the transaction. The GST Fitment Committee is of the opinion that 18% GST should be levied on this income from payment aggregators. The committee believes that this type of GST is unlikely to affect customers.

GST will be collected from payment gateways and aggregators

Actually this GST will be collected from the payment aggregator. Payment aggregator is a third party platform and helps a merchant to accept payment amount. Razorpay, Paytm and Google Pay are examples of payment aggregate.

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Actually, payment aggregators charge some money from merchants for providing their services. This is 0.5-2 percent of every transaction. However, most aggregators keep it at 1 percent. The government charges service tax on this 0.5-2 percent amount. Therefore, it will not have a direct impact on common people. But it will create problems for small shopkeepers.

GST Council meeting held in Delhi

The GST Council meeting was held today under the chairmanship of Finance Minister Nirmala Sitharaman. The meeting focused on GST rates on insurance policies and important decisions were taken in the interest of customers.

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Due to the great features that come with credit cards, its use is increasing continuously. But there is no doubt that most of the people using credit cards are unaware of some of its very important features. If you have a credit card with a limit of Rs 1 lakh, through which you have done a transaction of Rs 80,000. Now suddenly you have an urgent work and now you have to do a transaction of the entire Rs 1 lakh. In such a situation, can you pay the bill of Rs 80,000 and then do a transaction of Rs 1 lakh again? Under the new credit reporting rules of RBI, this becomes a very important question.

You can spend above the limit even without paying the bill

According to experts, at present, the limit of your card is restored shortly after paying the credit card bill, that is, you can use its full limit shortly after paying the bill. Not only this, if you do not pay the full bill of the card within a billing cycle, then also you can transact more than the limit. However, you will have to pay a charge for this.

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Talk to the bank for Overlimit

Suppose, a card issuer charges 2.5% of the overlimit amount with a minimum fee of 500. This charge can be levied once in a billing cycle. You can talk to your bank or card issuing company to understand this process whether overlimit transactions are allowed on your card and if yes, then how much will you have to charge for this. Apart from this, you can also apply to increase your card limit.

Report has to be given to the bank

The bank will now have to report your credit habits to Credit Information Bureau (India) Limited (CIBIL) or Experian, whereas earlier the bank used to give records of old monthly frequency. This means that your credit score can potentially fluctuate during a month, which was not the case earlier.

What will be the impact on the credit score

Suppose, you have used 80 percent of your card limit, due to which your credit score may decrease slightly. But if you want to pay the bill before the billing cycle ends and the bill is generated, then it will not have any significant impact on your score.

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Paying rent through third party apps will be expensive

1 percent charge will be levied on all rental transactions done through third-party payment apps like CRED, Paytm, Mobikwik, Freecharge. This charge will be capped at Rs 3,000 per transaction. These rules will come into effect from August 1.

Extra charge will be levied on educational transactions too

Apart from rent payment, educational transactions are also going to be expensive. The charge on payment through third party apps for educational transactions has also been increased to 1%. However, there will be no charge on transactions through the college or school website or their POS machines and international educational payments.

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Fuel transactions will also become expensive.

If you make a fuel payment of less than Rs 15,000 through HDFC Bank credit card, you will not be charged extra. However, if you make a fuel payment of more than Rs 15,000 at one go, you will have to pay 1% extra charge, the maximum limit of which is Rs 3,000.

Utility payments will become expensive

If you use a credit card to pay utility bills, then you need to be cautious. Actually, there will be no extra charge for utility transactions of less than Rs 50,000 through HDFC Bank credit card, while on payments above this amount, you will have to pay 1% charge per payment, which has a limit of Rs 3,000 per transaction.

Change in late payment charges:

The late payment fee structure has been revised based on the outstanding amount, which will range from Rs 100 to Rs 300.

Change in Tata Neu Card rules as well

If you are a user of Tata Neu Infinity HDFC Bank Credit Card and Tata Neu Plus HDFC Bank Credit Card, then there is bad news for you. There is going to be a big change in the cashback structure on UPI payments made through these two credit cards. These changes will also come into effect from August 1, 2024. Now if you make UPI payments by linking these cards to the Tata Neu app, then you will get more benefits. If you make UPI payments by linking these cards to other UPI apps except the Tata Neu app, then you will get less benefits.

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But sometimes your expenses exceed your limit, or you suddenly have an emergency, in which case you feel the need for a higher credit card limit. The good thing is that you can meet your needs by increasing the credit card limit. Banks give you this facility. You can apply to the bank to increase your credit card limit. For this, banks check you on certain parameters and see whether your limit can be increased or not.

Benefits of increasing credit card limit

There are many benefits of increasing the credit card limit. First of all, when your credit card limit is high, more of your needs are covered. If you need more money for lifestyle expenses or medical expenses or child’s fees, then you get a backup. This increases your buying power.

Credit score is better than credit utilization ratio

Banks look at your credit utilization ratio. CUR means that how much is your credit limit and how much you spend. Lower the CUR, better is the credit score. Generally 20-30% CUR is considered good. If your CUR is low then banks consider you a less risky customer.

Think of it this way, suppose you are relying on credit cards for most of your expenses. Your CUR has reached 70-80%. That means you are spending up to 80% of the limit. In such a situation, the bank will feel that you do not have the money to cover your expenses and you may default on the loan. In such a situation, there is an impact on your credit score, as well as there may be a problem in getting the loan. Because one thumb rule is that banks want to give loan only to him, so that he knows that he will continue to get regular income in the form of installment.

But remember these things before increasing credit score

The biggest risk of increasing the credit card limit is that due to the increase in buying power, you start spending extravagantly. When you cross the limit of your budget, you do not even know, in such a situation your credit score is affected, the cost of EMI on your head also increases.

Due to this you also have to pay more interest. If you spend more then the burden of interest also keeps increasing on you. It is not necessary that you will be able to clear your entire credit card due every month, in which case it may add more worries to you.

You can also keep multiple credit cards without increasing the credit card limit. With this, you will get different features and offers, but if you want to adopt this option, then you should know that you will have to pay different annual charges on different cards. Also, having multiple cards can make it difficult to manage payments or remember the credit period.

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