HDFC Bank - May the credit grow forever

A undesirable news by HDFC bank to credit card holders is sending a message about what they encourage.

First the news:

“HDFC Bank hikes late fee on credit card bill payment”. The charge from April 1, 2019 is listed below:

Balance Rs.	Till 31/Mar/19	From 01/Apr/19
Less than 100	Nil	Nil
100 to 500	Rs 100	Rs 100
501 to 5,000	Rs 400	Rs 500
5,001 to 10,000	Rs 500	Rs 600
10,001 to 25,000	Rs 750	Rs 800
More than 25,000	Rs 750	Rs 950

In other words, if outstanding is Rs.500 late fee will be Rs.100 (20%). Let’s see how it looks for others:

If balance is Rs	Late fees Rs	%
100	0	0
500	100	20%
5000	500	10%
10000	600	6%
25000	800	3%
100000	950	1%

The message is take credit and enjoy less late fees payment as they will get more interest earnings. Customers are informed higher outstanding will attract less late payment fees.

The difference of 19% (between Rs. 500 and Rs.100,000) will be recovered easily by charging 3% to 4% on outstanding amount on a monthly basis.

Quotes to remember:

“Beware of little expenses; a small leak will sink a great ship.” ~ Benjamin Franklin

“You cannot escape the responsibility of tomorrow by evading it today.” ~Abraham Lincoln