HDFC Bank’s new credit card rules effective from August 1; check key changes

HDFC Bank will implement revised credit card terms effective August 1st, 2024, aligning them closely with industry standards observed by other banks.

The revised credit card terms include:

• HDFC Bank will introduce a new fee structure for credit card rent payments made through third-party apps such as CRED, Paytm, Cheq, MobiKwik, Freecharge, and others. The bank will levy a 1% charge on the transaction amount, with a maximum fee capped at ₹3,000 per transaction.
• Effective August 1, 2024, HDFC Bank has introduced a new fee structure where educational expenses paid through third-party payment apps using HDFC credit cards will incur a 1% charge, capped at ₹3,000. This adjustment aligns HDFC Bank’s policy with that of other banks. The fee applies when using HDFC credit cards through third-party apps . It’s essential to factor in this fee when scheduling educational payments with HDFC credit cards via third-party apps.

Exceptions do exist within the new fee structure for educational payments using HDFC Bank credit cards. For instance, transactions made directly through college/school websites or their POS machines using your HDFC credit card incur no charges, making it a favorable option to bypass the 1% fee. Additionally, payments for international education are exempt from this fee.

• HDFC Bank is implementing a fee for significant utility bill payments using their credit cards. Initially, this applies to all utility bills (electricity, water, gas, etc.) paid with HDFC credit cards. No fee is charged for transactions up to ₹50,000. However, for utility bills exceeding ₹50,000, a fee of 1% of the transaction amount will be applied, capped at ₹3,000 per transaction.
• The bank does not charge an additional fee if your fuel transaction is below ₹15,000. However, transactions exceeding ₹15,000 incur a 1% fee on the entire amount, capped at ₹3,000 per transaction.
• The bank is implementing redemption charges for rewards. Starting now, all credit card holders who redeem their reward points for a statement credit will be subject to a ₹50 fees. This change is particularly impactful for many HDFC Bank entry-level credit card users.
• The annual and renewal fees for HDFC Bank’s 6E Rewards credit cards are going up. The annual/renewal fees for the 6E Rewards XL-IndiGo HDFC Bank Credit Card were previously charged by the bank at a rate of ₹1,500 plus GST, while the 6E Rewards-IndiGo HDFC Bank Credit Card was charged at a rate of ₹500 plus GST. 
• Starting August 1, the annual/renewal fees for the 6E Rewards XL - IndiGo HDFC Bank Credit Card will be ₹3,000 plus GST, while the 6E Rewards - IndiGo HDFC Bank Credit Card will be ₹1,500 plus GST. 
• Choosing the Easy-EMI option at any online or offline store incurs an equated monthly installment (EMI) processing fee of up to ₹299 imposed by HDFC Bank. HDFC SmartEMI is a service provided by the bank enabling users to convert their credit card payments into EMIs.
• HDFC Bank has updated its late payment fee structure starting August 1, 2024. The fee amount now varies based on your outstanding balance, ranging from ₹100 to ₹1300.

Key points for consideration

The updated terms for HDFC Bank credit cards reduce the appeal of using third-party apps, particularly for rent and education payments.

• Starting August 1, 2024, utilizing third-party apps such as CRED, Paytm, Cheq, and Mobikwik for rent and education payments will attract a 1% fee, with a maximum cap of ₹3,000 per transaction.
• The introduction of the new fee could potentially nullify any benefits from rewards offered by third-party apps, despite their previous incentive schemes.

It’s advisable to examine these updates and consider their potential impact on your spending patterns. While the bank probably notified customers of these changes, you can also visit their website for further information.

Alternative strategies to adapt to changes in credit card terms

Below are alternative strategies to contemplate, tailored to your specific circumstances:

• Consider making direct payments for rent and education expenses whenever feasible. Utilize the college/school website or their POS machines with your HDFC credit card to bypass the 1% fee.
• Carefully assess reward programs. If you primarily used third-party apps for their rewards, analyze the new fee structure against the rewards offered to determine if it remains beneficial.
• Explore alternative payment methods to settle rent or education bills that circumvent the new fee while potentially enabling you to earn rewards, if applicable.

By carefully weighing these factors, HDFC Bank credit cardholders can make well-informed decisions regarding their management of rent and education payments amidst the updated terms.