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HDFC credit card holders can convert their big-ticket purchases into EMIs. The EMI conversion option allows customers to pay off large purchases easily over a longer period without having to part with heavy cash at once. One can avail HDFC Credit Card EMI in 2 ways- directly at the (select) merchant or using the ‘Smart EMI’ option through net banking. Given below are the details of HDFC Credit Card EMI and how to calculate it.
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EMI stands for Equated Monthly Instalment. Basically, customers can break off big-ticket purchases into smaller pieces and pay it off over a few months. This way the customer’s savings don’t take a severe hit. To provide this facility the bank charges interest on the amount. The customer will have to pay off both the interest as well as principal amount.
There are various ways via which customers can avail the HDFC credit card Smart EMI facility.
Net Banking – Customers who have an HDFC credit card account can follow the below-given steps:
Phone Banking – As an alternative, you can always get in touch with HDFC credit card customer care centre to apply for the EMI service. The customer care representative will guide you through the process and let you know about details like rate of interest, the amount you are eligible for and tenure. After the application is successful you will receive an alert via SMS and email.
Customer can calculate the EMI and view the monthly repayment schedule easily. The steps are:
There are certain advantages of converting big-ticket purchases into EMIs. These are:
Lower Rate of Interest – Compared to credit card finance charges, EMIs charge lower rate of interest. So, it is better to create an EMI beforehand and pay off in smaller chunks than to risk the chance of missing payment and incurring finance charges.
Helps Maintain Cash Reserve – EMIs allow user to pay off purchases over many months. This way they do not instantaneously lose a large chunk of money by paying the bill.
0% Interest EMIs – Many online retailers like Flipkart, Amazon offer interest-free EMI option to its customers on specific items.
Waiver on Prepayment Penalty – Customers can request their banks to waive off any penalties that they might have incurred on prepaying the loan amount.
No Documentation – No documentation is required to convert purchases into EMI.
Blocked Credit Limit – Customers who convert their purchases into EMI will find that their credit limit is blocked. The blocked amount will be equal to the amount converted into EMI. The limit will be unlocked as EMIs are paid.
Not every credit card has EMI facility – Before making a purchase make sure that your card provider offers this service.
Always pay the full outstanding amount – If you have availed EMI facility then you must pay off the entire amount by the due date. Otherwise, you will incur credit card interest rate on top of the EMI interest.
Shop on Festive Seasons – Cardholders can usually find lower interest rate & 0 processing fee charges around the festive season.
What is the interest rate on HDFC credit cards EMI?
The rate of interest on HDFC credit card’s EMI varies from case to case. However, customers can expect an interest rate in the vicinity of 20% p.a. for tenure of 6 to 24 months.
Can gold & jewellery purchases be converted into EMI?
No, currently gold & jewellery purchases cannot be converted into EMIs.
How long does it take to convert Purchases into EMI?
Eligible cardholders can get their purchases converted into EMIs instantaneously.
What are the pre-closure charges on HDFC credit card EMI?
Currently, HDFC Bank charges 3% of the balance principal outstanding + GST as pre-closure charges.
Following RBI’s directive HDFC Bank is providing payment deferment option to their cardholders. This scheme was brought out to provide much needed relief to people affected by the lockdown. The moratorium period is 6 months long. Initially, RBI had announced moratorium until 31-May-2020 but now it has been extended till 31-Aug-2020. Users may opt for the Moratorium if they are facing a cash crisis amidst the lockdown and the prevailing COVID-19 disease.
| Benefits of Moratorium | Drawbacks of Moratorium Period |
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It only allows the user to pay their bills at a later date. However, interest will still be accrued by the cardholder. |
Let us understand how credit card interest rate will be charged during the moratorium with the help of an example:
Assumptions made:
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Total Amount – Rs. 10,000 as on 2nd March
Next Due Dates – 27 June 2020 | 27th of all subsequent months
HDFC Credit card interest rate calculation:
Interest levied for 6 days (Between March 2 and March 7) = 69.04 [6*10000*3.5%*12/365 = 6.904]
Interest levied for 31 days (Between March 8 and April 7) = 356.71 [31*10000*3.5%*12/365 = 35.67]
Interest levied for 30 days (Between April 8 and May 7) = 345.205 [30*10000*3.5%*12/365 = 34.52]
Interest levied for 31 days (Between May 8 and June 7) = 356.71 [31*10000*3.5%*12/365 = 35.67]
Total interest accrued: 356.71 + 345.205 + 356.71 + 69.04 = Rs. 1,127.665
Total amount payable after 3 months will be Rs 11,127.665 (10,000 + 1,127.665).
This is the total due amount that will be reflected in cardholder’s June’s credit card statement.
Now, if you avail the Moratorium for three more months as well then the Interest accrued will be:
Interest levied for 30 days (Between June 8 and July 7) = Rs. 345.205 [30*10000*3.5%*12/365 = 34.52]
Interest levied for 31 days (Between July 8 and August 7) = Rs. 356.71 [31*10000*3.5%*12/365 = 35.67]
Interest levied for 31 days (Between August 8 and September 7) = Rs. 356.71 [31*10000*3.5%*12/365 = 35.67]
Now, the Interest accrued in the second Moratorium Period will be: Rs. 1,058.625 [345.205+ 356.71+ 356.71]
Total Interest that becomes payable after the two Moratoriums: Rs. 2,186.29
(Interest in Moratorium 1.0 [1,127.665] + Interest in Moratorium 2.0 [1,058.625])
Total Due Amount in September’s Credit Card Statement = Rs. 12,186.29
HDFC Bank will automatically provide moratorium period to all those cardholders that don’t pay their bills between 1 March 2020 and 31 August 2020. However, we advise cardholders to get in touch with HDFC Bank and apply for the scheme manually.
The moratorium lets the cardholder defer payments for up to 6 months. Meaning, customers don’t get waivers or concession on the interest or due amount. Hence, we suggest you only opt for the moratorium if you require cash during this period.
Suggested Read: Should you opt for the moratorium for your credit card dues?
