Over the last few years, a clear trend has emerged in the Indian credit card space. Almost all major banks have started charging extra for essential, low-margin categories- rent, fuel, utilities, education, and government-related payments. These spends generate limited profitability for banks, and card issuers are no longer willing to subsidise them indefinitely.
After banks like ICICI Bank tightened charges and caps across multiple everyday categories, IDFC FIRST Bank has now joined the same league. By introducing transaction fees and fair-usage limits on essential spends, IDFC FIRST is effectively signalling that credit cards are meant for discretionary and lifestyle spending, not as a universal payment instrument for every bill.
This move may not look dramatic at first glance, but for users who rely on their IDFC FIRST credit cards for routine, high-value payments, it marks a clear and meaningful devaluation.
Once ₹20,000 is crossed, 1% is charged on the entire utility amount, not just the excess.
✅ Club Vistara IDFC FIRST Credit Card
✅ IndiGo IDFC FIRST Credit Card
This isn’t a flashy devaluation, no rewards have been cut and no headline benefits have been removed, but it is a very deliberate cost-side tightening.
IDFC FIRST Bank is clearly:
But in the end, one question remains. IDFC FIRST Bank credit cards were already struggling to stay relevant, especially after repeated reward cuts and reduced appeal compared to peers. Tightening rules and adding fees on essential spending categories only makes these cards less attractive, not more.
For a portfolio that many users already consider underwhelming, this move feels confusing and counter-productive. Instead of reviving interest or improving value, IDFC FIRST Bank appears to be making its cards harder to justify in everyday use.
After banks like ICICI Bank tightened charges and caps across multiple everyday categories, IDFC FIRST Bank has now joined the same league. By introducing transaction fees and fair-usage limits on essential spends, IDFC FIRST is effectively signalling that credit cards are meant for discretionary and lifestyle spending, not as a universal payment instrument for every bill.
This move may not look dramatic at first glance, but for users who rely on their IDFC FIRST credit cards for routine, high-value payments, it marks a clear and meaningful devaluation.
Effective From 18th January 2026:
🏠 Rent & Property Management Fee
- Charge: 1% of transaction value
- Minimum: ₹249 per transaction
- Applies to: Domestic transactions only
- MCC: 6513
⚡ Utility Spends – Fair Usage Policy
- No Fee: If aggregate utility spends are ₹20,000 or below in a statement cycle
- Fee: 1% on aggregate utility spends if total utility spends exceed ₹20,000 in a statement cycle
- MCCs: 4814, 4816, 4899, 4900
Once ₹20,000 is crossed, 1% is charged on the entire utility amount, not just the excess.
⛽ Fuel Fee
- No Fee: If aggregate fuel spends are ₹30,000 or below in a statement cycle
- Fee: 1% on aggregate fuel spends if fuel spends exceed ₹30,000 in a statement cycle
- MCCs: 5172, 5541, 5542, 5983
🚆 Passenger Railways Transaction Fee
- Fee: 1% on Passenger Railway spends
- Trigger: If railway spends exceed ₹25,000 in a statement cycle
- Over & above: Any convenience fee charged by the booking platform
- MCCs: 4111, 4112
🛣️ Tolls & Bridges Transaction Fee
- Fee: 1%
- Trigger: If toll & bridge spends exceed ₹10,000 in a statement cycle
- MCC: 4784
🎓 Education Payment Fee
- Fee: 1% of transaction amount
- Minimum: ₹249 per transaction
- Applies to: Education payments made via third-party apps only
- MCCs: 8299, 8211, 8241, 8244, 8249, 8220
🧾 GST Impact
- GST: 18% applicable on all fees, charges, and interest
- Effective cost becomes 1.18% (or higher due to minimum fee)
❌ Cards Exempt from These Charges
The following cards do not attract:- Rent & Property fee
- Utility surcharge
- Fuel fee
- Education payment fee
- Railway transaction fee
- Tolls & Bridges fee
✅ Club Vistara IDFC FIRST Credit Card
✅ IndiGo IDFC FIRST Credit Card
This isn’t a flashy devaluation, no rewards have been cut and no headline benefits have been removed, but it is a very deliberate cost-side tightening.
IDFC FIRST Bank is clearly:
- Discouraging low-margin, non-MDR-friendly spends like utilities, fuel, education and rent
- Monetising everyday categories by introducing hard caps as low as ₹20,000 to ₹30,000 per statement cycle
- Applying fees on the entire spend once the threshold is breached, not just on the excess amount
- Nudging heavy users toward premium products, with FIRST Private remaining exempt from these charges
But in the end, one question remains. IDFC FIRST Bank credit cards were already struggling to stay relevant, especially after repeated reward cuts and reduced appeal compared to peers. Tightening rules and adding fees on essential spending categories only makes these cards less attractive, not more.
For a portfolio that many users already consider underwhelming, this move feels confusing and counter-productive. Instead of reviving interest or improving value, IDFC FIRST Bank appears to be making its cards harder to justify in everyday use.
