Since the epidemic, digital purchases have grown in prominence, and credit card spending is catching up once more. Part of the reason for this turnaround is the RBI’s decision to raise the ceiling for contactless transactions from Rs 2000 to Rs 5000, effective January 1, 2021. Though many people fall into debt as a result of their irresponsible, unregulated use of credit cards, if you know how to use them responsibly and pay your credit card bills on time, they may be very useful in the long run.
Many people have the tendency of merely paying the bare minimum each month. This is a poor financial strategy since they do not realize that they will be in debt month after month. Because interest will continue to accrue on the balance, your debt will grow with each passing month. Different interest rates apply to different sorts of transactions; for example, cash advances have a greater interest rate than other forms of transactions. If you are behind on your payments, your credit score will suffer as a result.
People frequently pay little attention to their monthly credit card payment. The bank may levy erroneous or extraneous charges, which may affect the amount owed on your credit card. Only if you are aware of the charges can you contest them. You won’t see these if you don’t thoroughly scan your bills. The interest rate on your credit card, for example, fluctuates frequently in response to changes in the Prime Lending Rate. As a result, it’s critical to keep a tight eye on your bill.
Tracking and managing your funds should be your first concern if you have many credit cards or loans to pay off. You might be tempted to pay off your low-interest bills first. However, your financial situation may be harmed as a result of this decision. Even if the total amount is higher, always pay off the high-interest bills first. As a result, you will save money on interest that you would otherwise have to pay.
As a general rule, make sure you’re only using 30% to 40% of your credit limit at any given time. Credit cards can be used to make emergency payments or to cover one or two monthly expenses. If you do use up more than 40% of your credit limit, double-check that the charge you’re making is worthwhile. Although you are not required to pay right away, you must settle these accounts at the end of each month. You should also keep track of your expenses to make sure you’re not overspending. You will be able to identify ways to reduce your spending this way. You can take use of a choice of expense tracking smartphone apps that are now available online and are free of charge.
You may be charged a late payment fee if you fail to pay your Credit Card bills on time. You’ll also have to pay interest on the amount you owe. You’ll eventually have to pay a significantly greater sum, and your credit score may suffer as a result. Setting up an automatic payment system is a simple way to avoid late payments. With this set up, you authorize your credit card provider to automatically take the bill amount from your bank account on a monthly basis.
Customers of HDFC Bank appreciate how easy it is to pay their credit card bills. You can pay your bills using HDFC Bank NetBanking or the HDFC Bank MobileBanking App if you have an HDFC Bank account.
Even You don’t have to worry about paying your HDFC Bank Credit Card bill if you don’t have an HDFC Bank account. You can pay it using your present bank’s NetBanking service, NEFT, or any other available payment method. If you prefer to pay in person at an HDFC Bank branch, you can do so with cash or a check.
With all of these useful tools at your disposal, you can effortlessly keep track of your credit card bills and make sure they’re paid on time!
*There are certain restrictions. HDFC Bank Limited has complete discretion over credit card approvals. Documentation and verification are required by the banks before a credit card can be approved.
FAQs on How to Close or Cancel HDFC Credit Card
You can cancel your HDFC Bank credit card at any moment by dialing 61606161/6160616, the HDFC Bank credit card customer service number. To connect with your city’s department, you must first add your area code before dialing the number.
Credit cards can also be closed or cancelled using the bank’s netbanking service or by physically visiting an HDFC Bank office and completing a completed Credit Card Closure Form that can be accessed online.
HDFC Bank credit card holders can also close their accounts online. To do so, take these steps:
- Click on the Credit Cards tab, then on the Credit Card Hotlisting option on the left-hand side. A list of NetBanking-registered credit cards will emerge.
After that, the card will be placed on a hotlist and will not be able to be used for any subsequent purchases.
You can deactivate your credit card by calling HDFC Bank’s customer service number or downloading the credit card closure form, filling it out, and mailing it to Manager, HDFC Bank Credit Cards, PO Box 8654, Thiruvanmiyur, Chennai 600041. You can also use your HDFC Bank Netbanking account to deactivate or hotlist your credit card.
All transactions with your credit card will be permanently halted once you close it. The bank will deliver the previous month’s credit card statement, as well as any outstanding balances. Before the credit card can be cancelled or closed, all outstanding balances must be settled. If there are any unused reward points, they will be released and will not be applicable to any future transactions. Closing a credit card can harm your credit score if you have more than one and use them all.
If he or she has more than one credit card and all of them are in use, credit card closure will only have a negative impact on his or her credit score. In this scenario, credit card cancellation can harm your credit score because it increases your credit limit as well as your credit utilisation score. If you want to close your credit card, it’s best if you cancel the one you just got and the one with the lowest credit limit first. All dues must also be paid before the credit card is closed.
Make a note of all the debts to be paid
Instead of looking at your entire credit card account at once, which can be overwhelming, divide it into smaller chunks. This aids in categorizing it. If you have more than one credit card, it’s best to pay off the one that’s due first.
What’s the best way to figure out which bill needs to be paid first? It is determined by two factors: the card’s interest rate and the outstanding bill.
For example, suppose you just have one credit card and a total bill of Rs.20,000. It’s a better strategy to divide it into four parts. This is made easy if you see and understand that you only have to pay Rs.5,000 instead of Rs.20,000 in total.
Prioritizing
It is recommended that you pay the credit card bill with the highest interest rate first, rather than the one with the highest balance. This will prevent you from paying a big quantity of money in interest over the next few months.
If you believe that paying the bare minimum of your bills will allow you to put money aside for the time being, think again. This may have an impact on your credit report and score. Banks will keep track of your spending habits, and if they notice that you are a risky spender, your credit card may be suspended.
Paying the card bill with the least balance
After you’ve paid off the credit card with the higher interest rate, you can go on to the card with the lowest balance.
This is entirely dependent on how many invoices have accrued and whose card has been used. This may not always be the case. Sometimes the smallest charge is associated with the card with the greatest amount. You’ll be able to pay off two essential debts this way.
After you’ve paid off the credit card with the highest interest rate, you can go on to the account with the smallest pending balance. Paying this gives you the mental lift you need to finish the remainder of your bills.
Getting a credit card with low APR
In India, unlike the United States of America, there are no credit cards with a 0% annual percentage rate. These cards are used to transfer credit card balances. The cardholder can pay off all of his or her outstanding invoices within the 0% interest period.
However, there are some cards that have a low interest rate when compared to others.
In this instance, you can have two credit cards and transfer the balance from the one with the higher interest rate to the one with the lower interest rate. You will save a significant amount of money on interest this way.
How do I pay back my credit card bill?
The Internet has made banking a lot easier. Almost all Indian banks offer Internet Banking, while some others use third-party bill payment services to offer online payment options.
There are several ways to pay your credit card bill online, as listed below.
Pay Credit Card Bill Online Using Net Banking
Time it takes to execute a credit card payment – instant (from the same bank’s savings account)
Using your net banking account is one of the simplest ways to pay your credit card bill online. If you have a credit card issuer’s savings account, your task is made much easier because you can just register your credit card in your existing net banking account and make the payment directly.
You can open an internet banking account for your credit card and make payments directly from it, even if you don’t have a savings account with the card issuer.
To learn how to pay credit card bills from major banks using your net banking account, follow the links below.
Pay Credit Card Bill Online Through NEFT
- Another online service that allows you to pay your credit card bill using any net banking account is NEFT funds transfer.
- You can pay a bank’s credit card bills using any other bank’s internet banking account using NEFT. You can use this service to transfer money from your savings account to your credit card account via the internet.
- However, before initiating a NEFT money transfer to your credit card, you must first add your credit card as a ‘Biller or Beneficiary.’
- You may require specific information such as the credit card number, cardholder name, IFSC code for credit card payments, bank name, branch, address, and so on to add the credit card as a beneficiary.
- Please keep in mind that the IFSC code for credit card payments is unique. Please double-check that you have the correct code before proceeding with the payment.
Depending on your bank, adding a new card could take anywhere from 30 minutes to 24 hours. You must wait until the card has been added before initiating the NEFT cash transfer.
Please see the links below for information on how to pay your credit card bill using NEFT.
How do banks recover credit card debt?
In previously stated, if you miss your first bill payment, your credit card account will not be marked as default. Some banks even provide an additional grace period following the payment due date during which no late fees will be assessed. For example, HDFC Bank offers a three-day grace period after the due date. If no payment is made by the due date, the issuer will begin sending reminders through SMS, email, or phone call. If you continue to fail to pay the Minimum Amount Due, the bank will consider you delinquent. For the number of days you haven’t paid your credit card bill, you will be marked delinquent. You will be classed as 5-day overdue if you do not pay the MAD within 5 days of the due date. You will be 30-day delinquent if you do not pay by the next due date. Following that, the credit card company would intensify its efforts to recover the amount from you. You will be bombarded with phone calls, text messages, and emails. Loan Recovery Agents (LRAs) may pay you a visit after 90 days. Some credit card companies will file a police report or send you a legal notice, while others will give you a One-Time Settlement as a compromise. Your credit card account will be placed in the recovery pool if you do not pay your payments for 190 days, or more than 6 months. The bank’s ultimate option is to take this action. The bank has designated your account as a Non-Performing Asset in this case (NPA). This means that your credit card account is considered a loss by the bank. They could now initiate a lawsuit against you or sell your debt to a debt collector.
Consequences of Payment Default
Credit Score Drop: Credit card providers routinely disclose your credit card information with credit bureaus such as CIBIL and Experian. As a result, credit bureaus will be informed of your settlement or default. Settlements and defaults have a negative impact on your credit score. They can stay on your record for up to seven years. This would alert potential credit card or loan providers that you were unable to repay the debt, making them less likely to lend to you or charge you a high interest rate. This is because they believe you are more likely to miss future payments. Late Fees & Credit Card Interest: If you do not pay the minimum amount due, you will be charged late fees and interest on your credit card. In addition, if you miss a payment on your credit card, certain banks will raise your interest rate. This will quickly increase the amount owed, causing the debt to spiral out of control.
Can I be jailed for credit card debt in India?
If you don’t pay your credit card bills, you won’t go to jail because it’s not a criminal offense. For failure to pay a credit card bill, they could launch a civil case in a court of law.
How does HDFC foreclose credit card EMI?
Select HDFC Bank credit cardholders with a valid HDFC Bank credit card issued in India are eligible for the EASYEMI Scheme. Select Corporate, Purchase, and Commercial credit cards do not provide the EASYEMI option. EASYEMI transactions made on Credit Card products that do not include the EASYEMI option will be charged in full to the card account.
Effective July 15, 2017, EASYEMI transactions will no longer be eligible for Reward Points.
The interest will be computed from the loan booking date to the payment due date for the first EMI.
Any questions about merchant payback / CashBack must be submitted within 180 days following the transaction.
EASYEMI is only available on’regular’ credit cards. It is not valid on cards that have been blocked owing to a payment due, a lost card reported, or an upgrade in progress, among other reasons. EASYEMI transactions on such Credit Cards will be charged in full to the card account and become due and payable.
The consumer is notified of the EASYEMI booking status (Success or Reject) by SMS/Email. CM should contact the PhoneBanking service to inquire about the rejection reason. In the event of refusal, the consumer must pay according to the statement.
From the date of transaction, EASYEMI conversion will take at least 4 working days.
EASYEMI is not applicable for Jewellery businesses or merchants designated by Acquiring Banks under Jewellery related Merchant Category Codes (MCCs). Any transaction made at such merchants will not be converted by HDFC Bank, and any such conversion request would be rejected in accordance with regulatory requirements.
EASYEMI must be used while making purchases at a merchant outlet or on the retailer’s website. It isn’t a conversion from the backend. If a merchant website offers HDFC Bank EASYEMI, the ‘HDFC Bank’ EMI option and the requisite duration must be selected on the merchant website’s payment page. The Bank is not liable or responsible for converting transactions where the cardholder did not select the ‘HDFC Bank’ EMI option or if technical challenges at the merchant’s end prevent the transaction from being routed to the Bank as an EMI transaction.
Before swiping your HDFC Bank Credit card at a physical location of a merchant (POS transaction), please check with the merchant to see if the EASYEMI feature is available. In POS transactions, EASYEMI is only valid for swipes made on an HDFC Bank/Plutus swipe machine. Before swiping the card, make sure the merchant is aware of your plan to use HDFC Bank EASYEMI and the tenure selection. The EASYEMI tenure, Transaction Amount, Merchant Payback, Loan Amount, EASYEMI Finance Charges (percent on reduced debt per annum), and EMI value will all appear on the charge slip generated after the swipe. If the tenure does not appear or appears incorrectly, please notify the retailer immediately. HDFC Bank is not responsible for erroneous swipes made by merchants, such as swipes made as a regular transaction rather than an EASYEMI transaction or swipes made on a different Bank swipe machine. The Bank is also not responsible for backend conversion of such erroneous transactions to EASYEMI transactions.
Before signing the charge slip, please confirm that you have read all of the terms and charges listed on it. If cardholders do not agree with the terms/charges, they can ask the retailer to cancel the transaction. The charge slip will be deemed ‘customer consent’ for EASYEMI terms, conditions, and charges once the merchant settles a transaction.
‘Merchant Payback’ may be applicable at some merchants. This information is provided by the merchant/manufacturer, not by the issuing bank. The ‘Loan amount’ in such instances will be Transaction Amount minus Merchant Payback Amount. To calculate EMI, EASYEMI Finance Charges will be charged to the ‘Loan Amount.’
The complete transaction amount will be barred against the HDFC Bank credit card’s credit limit. When the EMI is billed and paid in subsequent months according to the EMI plan, the credit limit will be freed.
The EMI debit on each statement will be included in the “Minimum Amount Due” and must be paid by the Payment Due Date. On the interest component of each EMI billed, service tax, education cess, and other taxes as imposed by Government laws from time to time will be applicable.
If the reimbursement made by the merchant is larger than 90.01 percent of the EASYEMI Principal Outstanding on Credit Card in the case of online EASYEMI transactions done at merchant websites, the EMI Loan will be pre-closed. Interest that has already been charged to the card as part of EMIs will not be reversed. EASYEMI preclosure Interest charges (as applicable) will be applied on the card since the EMI will be preclosed, e.g. the Customer is in the third month of EMI and the statement date is the 25th of every month. If the loan is preclosed on November 19th, interest will be charged from October 25th to November 19th as ‘Preclosure Interest Charges.’ The EMI Loan will not be pre-closed if the merchant refund amount is less than 90.01 percent of the EASYEMI Principal Outstanding. In such circumstances, the outstanding balance of EASYEMI Principal would be lowered to the extent of the refund, and the EMI for the remaining tenures will be decreased.
In addition to these terms and conditions, all merchant terms and conditions would apply.
HDFC Bank has ultimate discretion in approving EASYEMI. The EASYEMI scheme is offered for select tenures. The purchase price, as well as interest and processing fees, must be repaid within the HDFC Bank Credit Card customer’s chosen repayment period.
The EMI program can be pre-closed by phoning the HDFC Bank Credit Cards customer care line, which is available 24 hours a day, 7 days a week. There will be ‘Preclosure Interest Charges’ (where applicable). Any repayment promised by the merchant at the time of loan booking will be deducted on a pro-rata basis in the event of preclosure. Any payment put into the credit card account in excess of the EASYEMI will not be considered a payment towards the amount borrowed under the EMI program, and the facility will not be closed. HDFC Bank reserves the right, without prior notice, to alter the pre-payment costs, and such amended charges shall be binding on the Card Holder.
Customers can cancel the EASYEMI transaction and pay in whole instead of monthly installments by calling the HDFC Bank Credit Card Customer Service line, which is available 24 hours a day, 7 days a week. Only if a customer contacts within four days of the transaction date will they be able to cancel. Original loan amount and merchant payback will be charged in full (and become payable) when the account is cancelled, EMI debits will be credited, and convenience will not be reversed. An EASYEMI transaction that has been cancelled on the card cannot be converted back.
The EMI will be closed if the minimum amount due is not paid for three consecutive months, and the principal outstanding, interest for the day until closure, and pre-closure charges will be charged to the Cardholder’s credit card account and shown on the next monthly statement. The HDFC Bank will have the right to demand prompt payment of any combined unpaid liabilities.
If the cardholder becomes late, the EMI shall be closed and the principal outstanding, the interest for the day till closure and the pre-closing costs shall be charged to the cardholder’s credit card account and show in the subsequent monthly statement. The HDFC Bank will have the right to demand prompt payment of any combined unpaid liabilities.
If a credit card is closed before all instalments have been charged, the amount owed under the EASYEMI plan may be charged as a single transaction for the card member. HDFC Bank will have the right to demand prompt payment of the total outstanding amount.
Any question or issue about a payment made via the EASYEMI option should be referred to HDFC Bank, and merchants will not be held accountable in any way.
If the EMI conversion occurs on the statement generating date, the first EMI will be billed the next month.
Can I pay all EMI of credit card at once HDFC?
Whether you have a personal loan, a home loan, a car loan, or any other loan from HDFC, you can pay off the outstanding EMIs all at once. Paying out the remaining EMIs all at once is a terrific approach to get out of debt and improve your credit score.
Pre-closing a loan account means paying down all of the EMIs at once. Here’s what you should do if you want to pay off all of your outstanding EMIs at once. Pay a visit to your local HDFC bank branch to speak with a loan officer. Inquire about your loan account’s current balance. Any pre-closure fees or penalties will be communicated to you by the loan officer.
Using a check or DD, pay the whole balance (sum of all pending EMIs + preclosure charges, if any). Along with the loan closure letter, the loan officer gives you an acknowledgment of the outstanding amount.
Does pre closure of loan affect cibil?
- Part-payments can reduce the amount owed and, as a result, the amount of interest you pay on your loan.
- A year is normally the lock-in term for banks, during which you are unable to close your loan account.
The weight of debt will be lifted from your shoulders when you close your loan account. However, make sure you do the math ahead of time to see if closing your loan early will actually save you money. Making a prepayment may not be helpful if the prepayment charges balance out the interest savings.
Frequently Asked Questions
You can contact the concerned bank and request that the monthly EMI or the term for which the EMI is payable be reduced if you make part-payments.
No, prepaying your debt will not affect your credit score. In reality, unless you settle the loan on schedule, your credit score won’t change much if you prepay your debt.
- What are the typical prepayment penalties I’ll have to pay if I pay off my loan early?
The prepayment penalty varies by bank and loan amount, as well as the length of time you have the loan. Prepayment penalties can range from 2% to 5% of the total amount owed.
In most cases, you can only prepay your loan after 12 EMI payments have been made.
Ideally, you should pay a big sum as a lump-sum payment, which will reduce either your EMI amount or the length of your loan. Paying a bigger amount can allow you to pay off your loan faster, which will help your credit score.
Do I need to pay outstanding balance?
You’re staring at your credit card bill, unsure how much of your balance you should pay. The decision is based on your current financial status.
On a monthly statement, the statement balance frequently surpasses the minimal amount required. Let’s imagine your bill balance is $2,000, but you only have $50 to pay. You should make the minimum $50 payment by the due date at the very least.
If you wish to avoid incurring interest, though, you should pay off the entire $2,000 sum on your account. Avoiding interest costs by paying the entire bill balance is a sensible move.
To avoid interest and fees, you no longer need to pay the outstanding balance. That will be taken care of by paying the balance on your statement.
However, if you pay off the entire outstanding sum, your credit utilization percentage will be reduced. This ratio is calculated by dividing the entire amount you owe on all of your credit cards by the total credit card limits on your cards.
Here’s an illustration of how the credit utilization ratio works. On your three credit cards, you owe a total of $2,500. All three cards have a combined credit limit of $10,000. This means you’re utilizing 25% of your available credit, resulting in a 25% credit usage ratio.
What is the significance of the credit usage ratio? It accounts for roughly 30% of your credit score. Some experts advise that you keep your credit utilization percentage below 30%. Others, however, advocate for smaller percentages, such as 25% or even 10%.
What is negative outstanding balance in credit card?
When your credit card balance falls below zero, you have a negative credit card balance. It appears as if there is a negative balance on the account. This means that instead of the other way around, your credit card company owes you money.
This usually occurs after you’ve paid off your outstanding bill or had a credit restored to your account. A classic example is when you use your card to make a purchase and then return the item, after which you will be given a credit to your account. Let’s say you spent $25 on a dress. You returned the dress, and the $25 was credited to your account, which had no balance at the time. Your account balance is now minus $25.
Will I be charged interest if I pay minimum payment?
While paying less than the whole debt this month may save you money, it will cost you more in the long term.
You won’t have to incur a late fee if you pay the minimum amount on your credit card. However, you will still be responsible for paying interest on the unpaid balance.
“The longer you make minimal payments, the more interest you’ll pay because your debt is still subject to financing charges until it’s paid off,” Sherry explains.
