What are Finance Charges in an HDFC Credit Card?

HDFC Credit Card Finance charges are the fees charged when you fail to pay your credit card balance before the due date. They are the costs of borrowing money, making purchases, cash withdrawals, and many other transactions made through the credit card. Every credit card holder should know the credit card finance charge to avoid these unnecessary costs.

In this blog, we have explained finance charges and what you can do to avoid them and make the most out of your credit card.

HDFC Bank imposes these finance charges in the following situations:

  1. Non-Payment of Total Amount Due: Finance charges are applied when you do not pay the outstanding balance by the due date. They are charged on the remaining balance until you pay it off.
  2. Partial Payment or Minimum Amount Due: By paying the minimum amount due (typically 5% of the total balance), you can avoid late payment fees, but finance charges are applied on the unpaid balance.
  3. Cash Advances Cash withdrawals attract finance charges from the day of withdrawal. It is charged until you pay the withdrawal amount completely. Banks do not offer an interest-free period for cash withdrawals.
  4. Revolving Credit Facility: If you choose to carry forward a balance (revolving credit), finance charges are applied to the entire outstanding amount and any new transactions until the balance is fully settled.

These loans are disbursed instantly to HDFC savings account holders (in 1 second) or within 7 days for non-account holders via NEFT/demand draft.

Follow the following strategies to avoid financial charges:

  1. Pay the Total Amount Due on Time: Clear the full balance before the due date to eliminate finance charges completely. Set reminders or schedule payments through online banking to never miss the due date.
  2. Avoid Cash Advances: Do not withdraw cash using your credit card because banks charge finance charges and additional fees from the day of withdrawal. So only use cash withdrawals in emergency situations.
  3. Monitor Your Billing Cycle: Keep track of your credit card statement and due dates to maximize the interest-free period for purchases.
  4. Track Spending: Stay within your credit limit to avoid over-limit fees.

Charge Type Details Additional Notes
Annual/Joining Fee Varies by card type: - MoneyBack+: ₹500 + GST - Millennia: ₹1,000 + GST - Regalia Gold: ₹2,500 + GST - Infinia: ₹12,500 + GST - Waived for some cards with annual spending (e.g., ₹1,00,000 for Millennia, ₹10,00,000 for Infinia). - Lifetime free cards (e.g., BizFirst, Tata Neu) have no annual fee.
Interest/Finance Charge 1.99%-3.75% per month (23.88%-43.2% per annum) - Premium cards (e.g., Infinia, Diners Black): 1.99% p.m. - Other cards: Up to 3.75% p.m. - Applies to unpaid balances, cash withdrawals, or partial payments after the due date. - Interest-free period up to 50 days if full payment is made by due date.
Cash Withdrawal Fee 2.5% of the amount withdrawn (minimum ₹500) + finance charges at 1.99%-3.75% p.m. - Cash limit is typically 40% of the credit limit (e.g., ₹80,000 for a ₹2,00,000 limit). - Use only in emergencies due to high costs.
Late Payment Fee Based on outstanding amount: - < ₹100: Nil - ₹100–₹500: ₹100 - ₹501–₹5,000: ₹500 - ₹5,001–₹10,000: ₹600 - ₹10,001–₹25,000: ₹800 - ₹25,001–₹50,000: ₹950 -> ₹50,000: ₹1,300 - Applies if minimum amount due (5% of total or fixed amount) is not paid by due date. - 3-day grace period mandated by RBI.
Foreign Currency Markup Fee 2%–3.5% per transaction: - Infinia, Diners Black: 2% - Tata Neu Infinity: 2% - 6E Rewards Indigo XL: 2.5% - Others: 3.5% - Applies to international or cross-currency transactions. - Additional GST applies.
Rewards Redemption Fee ₹50 per redemption for statement credit (cashback) - Exempt for premium cards (e.g., Infinia, Diners Black, Swiggy). - Applies to redemptions via NetBanking or customer care. - No fee for other redemption types (e.g., vouchers, air miles).
Rent Payment Fee 1% of transaction amount (capped at ₹4,999) via third-party apps (e.g., CRED, Paytm) - Effective from July 1, 2025. - Applies to rent payments made through platforms like CRED, Paytm, MobiKwik.
Utility Bill Payment Fee 1% of transaction amount (capped at ₹4,999) for bills > ₹50,000 (₹75,000 for business cards) - Effective from July 1, 2025. - Insurance payments exempt.
Wallet Loading Fee 1% of transaction amount (capped at ₹4,999) for loads > ₹10,000/month (except PayZapp) - Effective from July 1, 2025. - PayZapp transactions exempt.
Fuel Transaction Fee 1% of transaction amount (capped at ₹3,000) for spends > ₹15,000 (₹30,000 for business cards) - Effective from August 1, 2024. - No fee for transactions below thresholds.
EasyEMI Processing Fee Up to ₹299 per transaction - Applies to EMI conversions at online/offline stores. - Subject to GST.
Over-Limit Fee 2.5% of the over-limit amount (minimum ₹550) - Charged if spending exceeds credit limit. - Avoid by monitoring credit utilization.
Processing Fee for Credit Card Loan Up to ₹999 + GST (for Insta Loan, Insta Jumbo Loan) - Applies to pre-approved loans against credit card limit.

Finance charges on HDFC credit cards can increase the overall cost of owning a credit card. But you can easily manage these credit card expenses by implementing disciplined financial habits. By paying your credit card bill on time, avoid cash advances, and keep track of your spending to avoid financial charges. It will also help you maintain a good credit score.

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