Following this decision, NPS tier-1 account holders will still be able to pay using a credit card, however, tier-2 account holders will no longer have access to this feature.
The National Pension System (NPS) Tier-2 Account Holders will no longer be able to make contributions using credit cards, according to a formal notification from the Pension Fund Regulatory and Development Authority (PFRDA) dated August 3, 2022.
“The Authority has decided to stop the facility of payment of subscriptions/contributions using credit card as a mode of payment in the Tier-II account of NPS. Accordingly, all PoPs are advised to stop the acceptance of credit card as a mode of payment for the Tier-II account of NPS with immediate effect,” the PFRDA circular said on the discontinuation of credit card payment in tier-2 NPA accounts.
Following this decision, NPS tier-1 account holders will still be able to pay using a credit card, however, tier-2 account holders will no longer have access to this feature.
Credit card payments will still be accepted for Tier 1 NPS accounts, though. Credit card payments for stock or mutual fund investments are discouraged since they involve excessive borrowing of high-interest funds.
For instance, NPS account holders who choose credit card payment must pay a 0.60 percent payment gateway fee. When we include GST, the over-leveraging becomes even more.
