HDFC Bank credit card in India

When it comes to exorbitant interest rates, even the loan sharks -- the neighbourhood moneylenders -- can learn a few tricks from the banks which have raised the charges to as high as nearly 50 per cent per annum for their credit card customers in the past few days.

Over the past few days, nearly all the banks - starting from PSU giant SBI to private sector leaders like ICICI Bank and HDFC Bank and foreign players such as Deutsche Bank and HSBC - have either raised or are in the process of raising the "finance charges".

These rates, between 35 and 50 per cent at present, are charged on credit card users for payments made after credit- free period, which ranges from 15 days to two months. These are over three times the current benchmark prime lending rates of less than 15 per cent at most of the banks.

The high rates are being charged despite a National Consumer Disputes Redressal Commission (NCDRC) ruling last month that "charging of interest at rates in excess of 30 per cent per annum from the credit card holders by banks for the formers' failure to make full payment on the due date or paying the minimum amount due, is an unfair trade practise".

To top it all, these high charges, which varied between 30-40 per cent till some days back, get a mention only in the asterix-marked fine prints of credit card statements and there is virtually no limit to what level these could be raised.

On their part, banks claim it has become necessary to raise these charges, which a customer has to pay after the expiry of his or her credit-free period, in the wake of tightened liquidity in the system.

However, while the hike in interest rate for secured lending products like auto and home loans have been mostly about 0.5- 1.0 per cent, the unsecured credit card finance charges are being increased by about 10 per cent.

Credit card defaults across the industry have been on the rise for months, but are now starting to reach worrying levels.

Latest data shows that outstanding amount on credit cards has nearly doubled over the past year.

The outstanding amount on credit cards rose by 87% over the past year to Rs 26,000 crore. CRISIL estimates that 17% of this portfolio is now in default. The highest default rate among all loan and credit portfolios.

"Defaults in all the unsecured portfolios are starting to rise and the credit card segment is seeing the sharpest increase," said Tarun Bhatia, CRISIL.

While rising defaults are the worst in the credit card portfolio, banks are dealing with higher non-performing assets in most of their retail portfolios. For further information about hdfc credit cards go here and see the latest rewards point programs available at HDFC.

CRISIL expects NPAs in the overall retail portfolio to rise to 4% over the next two year. Car and commercial vehicle portfolios are seeing defaults upto 4% of total portfolio, while defaults in small ticket personal loans have reached 9%, a figure, which could rise to 13% soon.

Experts say the situation is only set to get worse and interest rates rise and rising prices make it tougher for consumers to meet their monthly loan and credit card payments.

No wonder then that a cautious RBI governor has warned banks to be careful about rising defaults across the retail loan segment, a warning that banks are now heeding.

"At the industry level, I think in the last few quarters, you've seen signs of some deterioration at an over-all banking level. Well the credit card product is a higher-risk product, which is why it has a high yield as well, " added Paresh Sukhtankar, ED, HDFC Bank.

Bankers are scrutinizing every customer who walks through their door very careful now. Interest rates are rising and so are defaults. That means that not only is getting credit becoming more expensive, it's also getting a lot tougher.

Police are looking for a man and woman after a Peterborough woman noticed two of her credit cards were missing and purchases were being made all over the city.

According to police, on July 15 between 11 a.m. and 1 p.m. the victim, a 36-year-old woman, was shopping at several stores.

When she returned home she got a call from both Visa and Mastercard who were making a follow-up call on a number of purchases that were made on her credit cards earlier that day.

Knowing she had not used the cards when she was shopping, she checked her wallet and noticed that both cards were missing, police said.

Police investigation revealed that a woman and a man had used the cards at several stores including Wal-Mart, Future Shop. EB Games, Petro Canada and Staples.

While at these stores they bought a lap top computer, an X-Box Game system, gift cards, a cellphone, gas and other items, police said.

The woman is described as East Indian, five-feet five-inches tall, medium to heavy build. She was last seen wearing glasses, with a gold chain around her neck, black pants and a cream coloured blouse.

The man is described as East Indian, five-feet 10 inches-tall, with a medium build and short black hair. He was wearing a black button up dress shirt and blue jeans.

Anyone with information is asked to call police at 876-1122 or Crime Stoppers at 745-9000.

The proliferation of credit cards and debit cards has seen to a surge in online shopping numbers in recent years. Still, many are not comfortable with the idea of revealing sensitive information such as the credit card number and other details on a website for fear of being cheated by fraudsters on the prowl.

For such people, banks have rolled out facilities that allow one to shop online without having to worry about security aspects of the transactions they enter into online. Nowadays hdfc credit card are offering a brunch of cashback and reward points which are really good for the newbies.

HDFC Bank and Kotak Mahindra Bank, among others, have a facility wherein an account holder can generate a card using the netbanking facility. HDFC Bank calls it the Netsafe card, while Kotak Mahindra Bank calls it netc@rd. Both, however, help one to pay for an online transaction without providing the credit card, debit card or account number.

And how? Because he would be using a virtual card for the online transactions.

This is how it works. Say you want to purchase a book online. You would need to log into your netbanking account and generate a virtual card, which can be seen on the webpage.

If the book you wish to buy online costs Rs 250, you can generate a one-time-use virtual card for Rs 250 and use this card number instead of the credit card number. The least this does is make sure that an amount of not more than Rs 250 is debited from your account.

Even if you lose the card number after that transaction, it would be useless because you have taken it for a single transaction in the first place.

In case there is a balance left, inspite of you having purchased your item online, the amount would be credited back to your bank account.

One can buy books, air tickets and even railway tickets via the website www.irctc.co.in using these cards. Electricity and mobile bills, too, can be paid.

There is, however, a limit of five Netsafe cards amounting to a maximum of Rs 25,000, which one can generate in a day.

Jayant Bhadauria, 34, head of education solutions at Adobe India, is expecting his second child this month. He has his heart set on a Shoppers' Stop pram that costs Rs 7,800. Says Bhadauria: "I liked the pram. To dish out Rs 7,800 would hurt, but since I have credit card points to redeem I don't mind the indulgence."

Credit cards don't just substitute for cash, they can also earn you reward points. "I use cards for their convenience and other benefits which I can milk," says Bhadauria. And you, too, can tap the monetary value of the points collected on your card.

How to accumulate points?

Every time you swipe your credit card to make a purchase, you collect reward points. Typically, you get one point per Rs 100-250 spent. This, however, depends on the card and the bank. For instance, banks offer more points on co-branded cards. State Bank of India gives one point per Rs 40 spent on its Gold Card and eight points per Rs 100 on its co-branded Tata Card.

The value of each reward point also varies across credit cards and banks. Says Sachin Khandelwal, head (cards), ICICI Bank : "The value of a point can be anywhere between 30 paise to a rupee and is also a function of the merchant partner in case of co-branded cards." For example, the value of one point on the SBI Gold Card is 70 paise, while it is Re 1 on the SBI-Tata Card.

The limitation with most accelerated reward points on co-branded cards, however, is that they can be redeemed only against products and services of the partnered establishment.

One also needs to remember that points get accumulated against spends (that too, not all of them), not for cash withdrawals.

How to redeem points?

What to redeem on. Earlier, banks offered a limited catalogue of products. Plus the prices were very high and one couldn't negotiate on them. But now there is a laundry list of what you can do with the points.

For starters, there is the conventional catalogue that includes apparel, gadgets, jewellery, luggage items, and the like. You can also encash your points against gift vouchers. For instance, with HDFC Gold Card you can get gift vouchers from Domino's, Cafe Coffee Day, Pantaloons, Westside, Lee, Music World and Landmark.

Going a step further, some banks have tie-ups with certain merchants where you can redeem points instantly. You don't have to contact the bank and get vouchers; you can pay using the points.

When the card is swiped, the reward points get reflected on the machine. So, if you have accumulated points worth, say, Rs 500 and you buy goods worth Rs 1,000, the merchant will offer you the choice of using your points for payment.

Some banks now offer air tickets on reward points, a feature that was earlier limited to co-branded cards. For instance, HDFC Bank has tied up with Jet Airways, Indian and Kingfisher Airlines to allow its card users to convert their reward points into air miles. The value of one air mile is usually equal to one reward point.

Reserve Bank of India (RBI), today approved the scheme of amalgamation of Centurion Bank of Punjab (CBoP) with HDFC Bank with effect from 23May.
The combined entity would have a network of 1,167 branches, a strong deposit base of around Rs1,22,000 crore and net advances of around Rs89,000 crore.
After the amalgamation, all the branches of Centurion Bank of Punjab will function as branches of HDFC Bank, a RBI release said here.
With this approval, all requisite statutory and regulatory approvals for the merger have been obtained, according to a HDFC Bank release.
The balance sheet size of the combined entity would be over Rs1,63,000 crore.

Imagine your mobile phone doubling up as your credit card. Reliance Communications and HDFC Bank have joined hands to offer virtual mobile credit cards in the country. Under the scheme, a Reliance mobile phone will get credit card functionality and the mobile number will act as the credit card number.

"Initially, the service would allow card holders to make payments to merchant partners like Adlabs, Yatra and Billdesk, with the list to be expanded to other partners follwing the roll out," Mahesh Prasad, president of the applications, solutions and content group at Reliance Communications said.

For HDFC Bank, this will be an additional payment choice for customers who don't want to disclose their credit card details online. "This is not an exclusive agreement. Over the next few months, we might tie up with more mobile companies as well for similar services," said CN Ram, country head for IT, said. Now you can compare HDFC credit card here and also know some incredible discounts offered from bank.

The service will come with a transaction passcode and there will be no financial liability to the user in the case of mobile phone theft.

It could become a preferred way of making payment in future as it does away with the risks associated with carrying cards and revealing its details at merchant establishments.Security and convenience are two major benefits of the new facility, he said.Internationally, this technology was introduced only a couple of years ago and has been a great success in countries like South Korea, Japan and Philippines, Mr Prasad added.

The business is simple: HDFC Bank HDB gets money with no interest on it, then loans it out at a competitive rate.

The money comes in from its dominance in India's brokerage transaction and settlement business. Then that cash grows by becoming the source of loans for the country's expanding middle and upper class.

India's growth is a key chapter in HDFC's story.

India is has the second-largest population -- about 1.1 billion -- and is the "I" in the BRIC bloc of fast-growing emerging markets.

As the economy's growth goes from hand-to-mouth to hand-to-wallet, people need to put their money somewhere. HDFC is that place for many Indians and is expanding constantly.

Today, HDFC Bank has more than 750 banking centers, up 60% from two years ago. Their focus has been in "unbanked" regions. More than 60% of its locations are located outside the country's nine largest metropolitan areas.

HDFC also is a preferred choice among brokerages. Six of 10 brokerages have accounts with the bank. That's particularly advantageous for HDFC because the Bombay (OOTC:BBAO) and national stock exchange have about $5 billion in cash transactions every day, according to a Jefferies (NYSE:JEF) & Co. analyst.

If the trends are to be believed, insurance cover on credit cards could be a thing of the past. Banks and credit card issuers are increasingly withdrawing the facility of free insurance cover that was ubiquitous with credit cards sometime back. So, if you have got that plastic in the last few months and you are jumping with joy for that fabulous 1 crore air accident cover that was a regular feature with your credit card, its time to read the fine prints.

HDFC bank one of the leading credit card issuers in India has decided to withdraw the complementary insurance cover on their Platinum Plus credit card from 1 January, 2008. This notification was sent to the credit card holders with their monthly statements. This effectively means that Rs. 1crore cover due to air accident, Rs. 2 lakh cover due to a rail or road accident and an accident hospitalization insurance of Rs. 1 lakh have vanished into thin air.

This process of withdrawing insurance benefits has been going on for some time now and almost all the major issuers are doing it. Bankers feel that this facility was not being visualized as a value add and the process of filing and settling claims was leaving the customers dissatisfied. Cash-back and other value additions score over insurance when it comes to value adds.

The offer of 'free for life' credit cards has been another reason to withdraw the insurance offered on credit cards. When credit card companies offer free for life credit cards, they are in fact letting their annual fees go. This loss is being made up with elimination of freebies like insurance covers.

source: Rupee Times

HDFC has asked housing finance regulator NHB to allow it to hold its shares in HDFC Bank without the shares being included in its capital market exposure. Although NHB guidelines allow HFCs to hold strategic stake in subsidiaries without invoking the exposure limits, these exemption do not apply to associates.

HDFC holds 14.8% directly in HDFC Bank and another 8.5% through investment companies, which makes the bank an associate, and not a subsidiary. If the housing finance regulator does not accede to the request, HDFC may have to sell shares worth Rs 400 crore from its portfolio to comply with NHB regulations. Also compare credit card rates of HDFC bank to explore new benefits on your shopping.

The apex housing finance company's guidelines on equity exposure comes in the wake of the Reserve Bank of India (RBI) tightening capital market exposure limits for housing finance companies (HFCs). Although HDFC increased its net worth through a preferential issue of shares, most of the money was invested in HDFC Bank.

Cleartrip.com, a fast growing online travel portal has partnered with one of the largest public sector bank HDFC to provide a discount of up to 50 percent on all domestic airline tickets. The discount will be available for customers who use HDFC credit cards to book 2 or more round trip domestic flight tickets in a single booking from Cleartrip.com. This is a limited time offer valid on online bookings made till 25th December for any travel dates.

50 percent discounts on air tickets will be available to HDFC Visa Signature, HDFC World MasterCard, HDFC Platinum Plus, HDFC Titanium, and HDFC Gold credit card holders. This cash back will be limited for a maximum base fare of Rs.3,500.

30 percent cash back on base fares up to Rs.3,500 will be available to HDFC Bank's Silver International, HealthPlus, Idea Silver and Value Plus credit card holders. All taxes will be borne by the customer and the cash back amount will be calculated on the base fares.

The Central Bank of Bahrain (CBB) has granted a licence to India's second largest private sector lender, HDFC Bank, to establish a wholesale banking branch operation in Bahrain.

The Bahrain operation will be HDFC Bank's first branch outside India. Now HDFC credit cards are offering you the cash back discounts on every purchase of yours.

The Bank was incorporated in 1994 by Housing Development Finance Corporation (HDFC) Limited, a premier Indian housing finance company established in 1977.

HDFC Bank HDB cleared a nine-week cup-shaped base the week ended Sept. 21. It rallied 49% over the next six weeks. The stock pulled back to its 10-week moving average last week, but found support at the line for a strong rebound in solid trade.

This might be a buy opportunity but for two problems. First, the market is in a correction, and new buys should be off the table.

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Second, look at that big downside volume spike in the week ended Oct. 19. That's a red flag.

Lehman Bros. recently began covering the Indian bank (OOTC:INDIF) , which has grown earnings between 40% and 51% in the past four quarters, with an overweight rating.

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HDFC Bank, the country's third-biggest by value, will not follow other private sector banks in stopping lending to small borrowers in the sub-prime segment following instances of excesses by recovery agents.

It will, however, exercise caution while extending loans to this category, in which it has an exposure of around Rs 500 crore.

Pralay Mondal, country head, retail assets and credit cards, HDFC Bank, told DNA Money, "The bank has always exercised caution in advancing loans and there is a need to be careful on the small-ticket-size loans, where the average size is around Rs 30,000. At times, people with a monthly salary of Rs 10,000 or so are tied up for 3-4 loans, which exceeds their salary levels. We still have the lowest NPAs in the retail category".

The bank expects that the education portfolio would contribute 15 per cent of personal loans, excluding credit cards, in three years.

"We think that the entire education loan space will get redefined. It is a new area and we will be very aggressive. In fact we are tying up with vocational and software training institutions for the purpose. This will also help increase our priority sector lending", Mondal said.

New generation ATMs redefining urban banking in Valley. With the HDFC bank operational in Valley through a network of two branches, its ATMs are doing brisk business for the bank by offering value added features.

HDFC residency road branch have 2 operational ATMs, one outside the branch and other within the shopping complex. Both ATMs are contributing enough to profit kitty of the bank that they are able to mange their rentals from it.

Bank has been doing well in attracting customers of other banks to use their ATM services; about 40 per cent of the transactions on ATMs of HDFC bank are done by customers from other banks. Asst. Vice President HDFC Bank J&K, Zubair Iqbal said, "Total transactions on ATM1 (Outside branch) were 13761, out of which 5491 were offus transactions: card holders of other banks using our ATM, thus constituting 40 per cent of total transactions. The outflow of cash was to the tune of Rs 5,09,32,000."

"I have my savings account with bank from past two years. Using the credit card of any of the bank is very essay but the real problem is to pay the credit card bill in long queue, but at HDFC one can pay its credit card bills through ATM. Not only this one can even order check book through ATM," Shazia, a customer of HDFC.

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A gang of three traders and an employee of a sales tax consultant were arrested for allegedly procuring credit cards in an illegal way and using them for `transactions' running into lakhs of rupees without purchasing anything, in turn duping banks.

"The sales tax consultant's employee supplied the traders with photocopies of documents submitted by the consultant's customers in their office. The traders procured credit and debit cards by submitting the photocopies. They pasted their own photos on the application forms but gave some fictitious addresses," Joint Commissioner of Police (Crime) Rakesh Maria said.

All the three traders owned electronic shops in Mira Road area in neighbouring Thane district and had the Electronic Data Capturing machines used for swiping in their shops.

Police suspect that other banks like Centurion Bank, HDFC, UTI, Bank of Baroda, Deutsche Bank have also been cheated.

With the demand for card payments on the rise, banks have hit their innovation buttons to offer a card for almost every conceivable need today. The latest offerings range from credit cards for shopaholics like women, offering reward points for purchases beyond a certain sum, to those that help overseas travellers avoid the hassles of currency exchange.

What's more, as an alternative to the meal coupons issued by companies to their employees, at least one bank has started offering a card that obviates the need to carry and count out coupons of various denominations.

Take for example, the ForexPlus card offered by HDFC Bank or the Travel Card from ICICI Bank. The cards, both pre-paid, help a person travelling abroad avoid having to exchange rupees for the currency desired, at least to the extent card payments can be made. The traveller can take a pre-paid card by paying in rupees, but make card payments in a currency relevant to the country he is visiting.

WHEN the credit card statements falls through the letterbox next year, expect to see a few changes on the print-outs.

The Department of Trade and Industry is introducing legislation which will force all credit card providers to draw attention to the order of payments they use.

Don't be alarmed if you aren't familiar with the term; apparently, two thirds of us aren't sure what it means or what impact it has on our credit card bill.

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Essentially it's the sequence in which credit card bills are paid. It might sound insignificant but it can have a major bearing on the cost of your debt.

HDFC Bank expects its overall advances to grow by over 30 per cent this fiscal, much higher than the anticipated credit growth of about 20-25 per cent for the banking industry in the period.

An important driver of this growth is likely to be retail advances, which are expected to grow by 30-40 per cent this fiscal, according to Mr Pralay Mondal, Country Head, Retail Assets and Credit Cards.

"Although there has been some de-growth in retail asset side for the industry, we will continue to grow at the same rate or better than last fiscal," he told reporters after the launch of HDFC Bank World MasterCard credit card targeted at the "absolutely super premium" Indian customers.

In the last two years, spending pattern through plastic money has changed drastically. Travelling, dining and jewellery are the top three purchases that Indians make through credit cards. Two years ago, it was jewellery and apparel purchases that formed the largest chunk of purchases through plastic money. Fuel accounts for a very small portion of credit card purchases as these are largely paid through debit cards.

"Jewellery, consumer durables, fuel purchases, apparel are a much smaller segment than travel and dining which comprise the largest chunk of credit card purchases. Eating out has in fact become a big concept now," says HDFC Bank VP and head (credit cards and product portfolio) Parag Rao. Experts say, while travel and hotel bills along with dining, account for about 25-35 % of the total value of purchases through credit cards, purchase of jewellery accounts for 10-11 % of the purchases . Apparel purchases account for 8-10 % and consumer durables like TV and mobile phones account for nearly 6-7 % of the purchases through plastic money.

Reliance Capital is entering the consumer finance business through a tie-up with HDFC Bank. The credit card business is first on its list of preferences and the present move would facilitate just that. This would be followed up by an entire range of activities like housing, auto and personal loans.

According to sources, the agreement would basically cater to the credit card business. The formal announcement will come in the next few weeks as the final modalities are being worked out. When contacted by ET, a Reliance Capital spokesman confirmed that discussions were on with a bank, but declined to divulge any details.

As per industry estimates, there are around 18.3m credit cards currently in use in the Indian market. The field is dominated by Citibank, Standard Chartered Bank, HSBC and the State Bank of India. The other prominent players include ICICI, HDFC and ABN Amro.

the corporate world is a school of hard knocks and it's not always that one gets two bites at the cherry. which is why many would be rather daunted by the thought of abandoning a cushy job in a foreign bank to slog like billy-oh in a startup private sector bank. however, call it a penchant for taking new challenges headon or just a quirk of fate; hdfc bank information technology head c n ram made that transition in 1994 without any fuss. sharing idlis and uttapams for breakfast with us at the mountview coffee shop on wednesday, the 45-year-old former vice-president (systems manager) of bank of america, says, "what lured me to hdfc was the excitement of being part of a team that would eventually shape the bank's future. at that point of time, besides me, the bank's workforce comprised the chairman, the finance head and his secretary.

Banks are suffering an estimated 12 per cent loss in their credit card operations. Losses on account of personal loans are 4 per cent, according to a recent study. Losses against loans given for cars are less than 1 per cent, a study by HDFC Bank said. Ravindra Rao, senior vice-president and head of retail collections, HDFC Bank, said collection of dues was a challenge for the industry.

THE comfort of buying now and paying later through credit cards is increasingly becoming a risky venture. The reason: there are syndicates, which collect details of a cardholder and impersonate them.

As the number of credit card frauds in the city is on the rise, the police, banks and credit card holders are looking for protection.

Some banks are also coming up with security mechanism to check online frauds involving credit cards. An official in HDFC Bank, Kolkata, says the bank has come up with a system, whereby, customers have to create their own virtual credit card - a code, which will be separate from the 16-digit credit card account number and the CVV number. "This number would be known only to the user," the official adds.

HDFC Bank launched International Silver Credit Card here. The bank has tied up with Visa which will enable card holders to access 1,10,000 stores, restaurants and other merchant establishments in India and over 18 million merchant establishments across the world, said Ms Uma Ratnam Krishnan, Country Head Retail Branch Banking while addressing a press conference.

The card has features like comprehensive insurance package, purchase protection, lower interest rates, various payment options and attractive discount programmes.

The card insurance package covers the card holder against loss of life and hospitalisation insurance in case of an accident. While the interest rate for this card will be 2.95 per cent per month for the first year and 2.50 per cent on renewal from second year onwards, existing customers of the bank will get special benefit and can avail the credit card at 2.5 per cent interest from the first year.

Apart from these features HDFC bank will offer two reward points for every Rs 100 spent through the card.

Credit card business in India is poised to grow at the rate of 30 per cent in the next two years, Santanu Mukerjee, Country Manager, Visa International, said here today.

There were six million Visa cards in India, 80 per cent of them in eight cities, he told reporters here. Launching the HDFC Bank International credit card, HDFC Bank Managing Director Aditya Puri, said the bank had taken a giant step forward in its quest to offer customers a complete range of financial services.

Bad credit can happen to anyone. The reasons could be different but the result is the same. Credit card companies see bad credit people as a good means to
fill up their coffers. Without paying attention to how the person got into this grim situation, they enforce their credit card issuing norms in such a way that they make maximum amount. How they rip us apart?Take a look at the following and you will find the answer for sure.

High interest rates
Low Credit limits
High Annual fees
Low grace periods