Key takeaways

  • SBI Card, HDFC Bank and ICICI Bank charge about 1% when you pay education fees through third-party apps like CRED or Paytm.
  • Paying directly on the school's website or at its card machine usually avoids that fee.
  • HDFC caps reward points on insurance payments each month (higher caps for Infinia and Diners Black).
  • Big annual payments can help you hit fee-waiver and milestone targets, if they still earn rewards.

School fees and insurance premiums are among the biggest payments many families make each year, often ₹50,000 to several lakh at once. Paying them by credit card can give you up to 50 days of interest-free credit, help you reach milestone bonuses and sometimes earn rewards. But banks have added fees and caps on exactly these payments. Here's how it works in 2026.

The 1% fee on education payments through apps

Most big issuers now charge about 1% if you pay school or college fees through a third-party app, rather than directly to the institution:

BankFee on education payments via third-party appsPaid directly to the school
SBI Card1% (from 1 November 2025)No fee on the school's website or its POS machine
HDFC Bank1%, capped at ₹4,999 per transactionNo fee
ICICI Bank1% via apps like CRED, Paytm, MobiKwikNo fee

On a ₹1,00,000 fee, that's ₹1,000 (plus 18% GST on the fee), which is more than most cards would give you back in rewards. The app may add its own convenience fee too.

How to pay school fees by card without the fee

  1. Pay on the school's own payment portal with your credit card, if it accepts cards.
  2. Use the card machine at the school's accounts office.
  3. Ask about the school's own surcharge. Some schools pass on the 1–2% payment gateway charge to parents. If so, compare that with the rewards and interest-free period you'd get.
  4. Convert to EMI carefully. Many banks offer EMI on large fee payments. Check the interest rate, processing fee and GST before choosing it. Zero-cost EMI tie-ups with some schools can be genuinely useful.

Insurance premiums: rewards with caps

Insurance premiums paid by credit card usually earn rewards, but many banks cap them. HDFC Bank, for example, limits the reward points you can earn on insurance each month, with the highest caps on Infinia, then Diners Club Black, and a lower cap on other cards. Other banks give reduced or no points on insurance for some cards. Check your card's terms before paying a big premium.

Paying insurance by card is still useful for:

  • The interest-free period (up to about 50 days) on a large one-time premium.
  • Annual fee waivers. A big premium can help you reach your card's yearly spending target, if insurance counts toward it.
  • Milestones. Cards like Axis Atlas give bonus miles at spending thresholds. Check whether insurance counts.

Is it worth it? A quick example

Say you pay a ₹60,000 school fee and a ₹40,000 health insurance premium.

  • School fee through CRED on an HDFC card: 1% fee = ₹600 + ₹108 GST = ₹708 cost, often with no rewards. Not worth it unless you need the credit period.
  • School fee on the school's portal: no bank fee. If your card rewards it at 1%, you earn about ₹600.
  • Insurance on a card that rewards it at 1.3%, under its cap: about ₹520 back, plus the interest-free period.

Education fees abroad

For fees paid to a foreign university, forex markup matters more than rewards. A 3.5% markup plus GST on a large fee is expensive. Compare a zero-forex card, a forex card or a bank transfer under the Liberalised Remittance Scheme (LRS) before paying. See our forex guide.

Watch out for these traps

  • Don't roll the bill over. Card interest of 36–45% a year on a ₹1 lakh fee is ₹3,000–3,750 a month. Only pay by card if you'll clear the full bill. See how card interest works.
  • Merchant category matters. Some banks treat education and government payments differently for rewards. Look for "education" and "insurance" in your card's exclusion list.
  • Utility and wallet rules. HDFC charges 1% on utility spends above ₹50,000 a month (insurance is excluded from that rule) and on wallet loads above ₹10,000 a month.

Compare the fees and exclusions on every card with our comparison tool, and read our guide to hidden credit card charges. If rent is another big payment for you, see paying rent by credit card.

FAQs

Is there a charge for paying school fees by credit card?

Through third-party apps, SBI Card, HDFC Bank and ICICI Bank charge about 1%. Paying directly on the school's website or card machine usually has no bank fee, though the school may add its own surcharge.

Do I get reward points on insurance premium payments?

Usually yes, but many banks cap them. HDFC caps insurance rewards each month, with higher caps for Infinia and Diners Club Black.

Should I pay school fees by credit card EMI?

Only if the total cost (interest, processing fee and GST) is low, or the school offers a genuine no-cost EMI.

Does paying insurance by card count toward the fee waiver?

On many cards, yes. Check your card's terms for exclusions.

Sources

About the author

Deepak

Founder & Editor, CardPicker

Deepak founded CardPicker and writes and fact-checks its credit card guides, comparisons and news.

✓ Fact-checked 27 September 2026Prices, dates and card terms in this article were checked against issuer websites, official pages and news reports listed under Sources. Card figures come from our database, which is re-verified regularly. Offers change often, so confirm on the issuer's site before you buy or apply. Spotted an error? Tell us.