Why no rewards when MDR is charged

This is a doubt that I have for a long time.

Aren’t wallet loads & credit card bill payments charged MDR?

And if yes, then why not give the rewards to the customer?

Is there something that I am missing.

I would love to know more about this. So please share what you know… Whatever you know…


People misused the option of loading the wallets with credit cards. They would load the wallet with a credit card, meet the milestone requirements for the card and then withdraw the money in their bank accounts.

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Yes. I am aware of that. People gaming the system.

But what I am asking is… If the credit card company still got the MDR and the money is still spent from the credit card, why do they not give the rewards to the customer.

I think it’s because these are the mass transactions and they can save up/cost cut so much money in rewards not given.

Of course this is my hunch/doubt. So I would like this cleared.

To discourage the practice of using credit money to be transferred back as cash balance as that in a way is bypassing the rules around unsecured lending

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OK. Makes sense…

But I would argue that the credit card companies still charge for the transactions none the less. So it’s a one way benefit.

Also how about credit card bill payment. Why are debit card rewards not given?

Any logic there?

Because that would be dual benefit- one for paying the utility using the card and one paying back the same charge.

But are we not paying annual fees and MDR seperately for both the credit card and debit card?

I guess this is a bit of a grey area. Depending on the person in the financial institution vs consumer the fair usage may change.

I just feel that these restrictions are one sided. Of course I am saying this as a consumer.
The banks/financial institution will have their own logic.

Actually cards like HDFC Millennia CC still allow you to load wallets and even give you 1% rewards. HDFC themselves also doesn’t charge extra for wallet loading. But of course the wallet company usually charges 1-3% + 18% gst on the charge to cover for the MDR.

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Yes. I use HDFC Millennia. So full paisa vasool and more on the annual fees.

I suppose only ICICI credit card allows cashback for insurance payments.

And considering insurance premiums are on the high side, this is good for meeting the spend limits for annual fees waiver and getting some rewards along the way.

But many credit cards have stopped rewards for insurance and house rent payments. Rewards are still OK. But those spends not considered for spend limits is just too much.