New HDFC Bank credit card rules: Reward points limited on certain transactions

Even as the new fee structure for credit card transactions, which among other things levied additional charges for payments using third party apps, is set to become effective from August 1, HDFC Bank has announced that it is capping reward points for several popular categories across cards.

HDFC Bank has capped reward points on utility spends and telecom and cable transactions to 2000 per month across all credit cards. This cap on reward points will come into effect from September 1.

“Education payments made through third party apps like (but not limited to) CRED, Cheq, Mobikwik and others will not earn reward points,” HDFC Bank said in a communication to its credit card holders.

“Education related transactions will not earn Reward Points/CashPoints on BizBlack Metal Card, BizPower, BizGrow, BizFirst, Business Regalia, Business Regalia first, Business Money back, CSC small business moneyback, Paytm Business, Flipkart Business, Retailio, Best Price Save Smart, Best Price Save Max, Swiggy HDFC Bank Credit Card and Pinelabs and with effect from 1st September 2024,” the bank said.

However, education payments made directly through college/school websites or their POS (Point of Sale) machines will earn reward points for all other credit cards issued by the bank. HDFC Bank has also capped the redemption of reward points to get Apple products at one product every calendar quarter with effect from October 1.

“On the HDFC SmartBuy portal, the redemption of reward points to get Apple products is capped at one product for every calendar quarter, effective October 1st 2024,” the bank said.

HDFC Bank has also restricted redemption points for Tanishq vouchers. “On the HDFC SmartBuy portal, the redemption of reward points for Tanishq vouchers will be capped at 50000 reward points for every calendar quarter starting October 1st, 2024,” the bank said.

The bank had imposed a 1% fee on rental transactions made using third party apps such as CRED, PayTM, Cheq, Mobikwik and Freecharge that is capped at ₹3000 per transaction from August 1. If customers spend more than ₹15000 on a fuel transaction, a 1% fee on the entire amount will be charged, which will be capped at ₹3000 per transaction.

HDFC is also implementing a fee for significant utility bill payments using credit cards. For utility bill payments exceeding ₹50000, a levy of 1% on the entire amount will be made and this will also be capped at ₹3000 per transaction. The limit is for consumer cards and for business cards the limit has been set at ₹75000 per transaction for business cards.

Credit card users earn cashbacks, reward points, gift vouchers and air miles for their regular spends. Credit card issuing banks typically offer such rewards for regular spending categories such as utility bill payments, grocery purchases, entertainment and dining.

But there have been many instances of credit card users going overboard with their spending in some of these categories. There have been instances where businessmen spend lakhs of rupees for utility bill payments using their personal credit cards. The payments were not made for the household electricity bills but for the dues incurred by their business units. Incidentally, utility bill payments is a significant earner of reward points.

HDFC Bank has also made loading funds from credit cards to the bank’s PayZapp wallet expensive from August 1. If a user adds money to her/his PayZapp wallet through credit card, then she/he will have to pay 1.5% of the amount transferred as fee plus additional GST (Goods and Services Tax) charges. This will work out to 1.77%. Currently, no charges are levied for such transactions.

The recent revisions in fee and revised terms is aimed at curbing the use of third-party apps and the misuse of credit cards to earn reward points.

Allirajan M is a journalist with over two decades of experience. He has worked with several leading media organisations in the country and has been writing on mutual funds for nearly 16 years.