Personal Finance

Should you go for festive offers on your credit card?

Keerthi Sanagasetti BL Research Bureau | Updated on October 23, 2021

While discounts and cashbacks look tempting, be mindful of high interest outgo on EMIs

In a bid to play along the revving animal spirits this festival season, banks are offering many discounts and cashbacks for purchases made through their credit cards. Apart from the offers on the co-branded cards (with the e-commerce websites), banks have offers on other purchases (online or showroom) as well.

Here we give you a low-down of few of the offers to help plan your big ticket purchases this festival season wisely.

What’s on offer

For the ongoing festival sales on e-commerce websites, banks have provided their customers blanket discount on all purchases and certain other discounts and cashbacks for specific purchases as well. For instance, Axis Bank (all credit cards) and ICICI Bank (on Amazon pay ICICI Bank credit card only) offer a flat 10 per cent discount on all products bought during the great Indian shopping festival on Amazon.in. Even customers of HDFC Bank can avail of a flat 10 per cent discount on all purchases on the website made using the bank’s credit cards.

However, many of these come with varying conditions such as a mandatory minimum transaction value and an upper limit on the discount value.

The discount on Axis bank cards is available for up to ₹1,500 for a minimum transaction value of ₹30,000. For electronics bought on the website, the discount is available up to ₹4,000 provided the minimum transaction is for ₹80,000. Further for the purchase of your mobile phones, you can avail an additional 10 per cent discount (up to a maximum of ₹1,250), for a minimum transaction of ₹5,000 on Amazon, using Axis bank cards.

Apart from e-commerce websites, banks also have lucrative offers on purchases made from retail outlets such as Croma, Reliance digital, Vijay sales, etc – on their online and offline stores alike. But it does come with terms and conditions.

For instance, ICICI bank credit card holders get a discount of ₹5,000 on minimum purchase of ₹1 lakh in Reliance Digital (valid through Dec 31, 2021, on purchases made on weekends only) or Vijay Sales (valid through November 20, 2021, on all days).

The EMI lure

SBI Card holders get an instant 7.5 per cent discount on their purchases from the outlets of Sathya for a minimum purchase of ₹20,000. Valid until November 10, the discount amount is, however, capped at ₹3,500 per card account, in this offer.

Similar discount of 7.5 per cent is also offered on purchases from outlets of Vasanth & Co (up to a maximum of ₹3,000 per card, for a minimum transaction of ₹15,000) for purchases made through EMI (on 6,9,12,18 or 24 month tenures).

For non-EMI transactions, the discount is limited to 5 per cent only. However, before jumping to avail the higher discount, you must consider the additional interest outgo on your EMI transactions. For EMI transactions opted on SBI cards , interest is charged at 14 per cent on monthly reducing balance for 3, 6, 9, or 12 month EMI transactions (interest at 15 per cent for 18 and 24 month EMI).

Even the no-cost EMI transactions that come with additional discounts carry additional charges. For instance, customers of HDFC Bank get a cashback of up to ₹7,000 while purchasing Apple products using the bank’s cards or through no cost EMI option. The EMI transactions come with a convenience fee of ₹199 plus GST. Customers should hence consider weighing such charges against the discount or cashback offered.

Besides, a few banks also offer the option of converting some purchases into EMIs instantly when buying in certain outlets. SBI cardholders, for instance, can use an EMI option with tenures ranging from 3, 6, 9 or 12 month EMI on purchases made in Croma stores. The attraction here is that unlike a traditional loan, there is no documentation required and no processing fee charged for availing of this EMI offer. But if you intend to use the option for bridging your short-term needs (say, until the next paycheck), it might not still be a great idea. This is because, aside from the 14-15 per cent rate of interest charged, these EMI options come with a 3 per cent foreclosure charges.

For the brand-savvy

If you are keen on specific brands, do run a check on the discounts and cashbacks offered by some banks on their credit cards. However, the donwside is that these are mostly available only on converting your purchases to EMI.

For example, SBI offers its cardholders cashbacks of up to 10-15 per cent on certain Bosch products, when purchased through the EMI option. The entire list of product range on which such offer is applicable, and the discount amount are specified on the bank’s website. Similar offers are available on other electronic brands such as Samsung (up to 27.5 per cent), Lenovo (flat ₹5,000 cashback on laptops) and Mistibushi Electric (5 per cent cashback on ACs), on EMI transactions made through SBI cards.

HDFC Bank, too, offers similar brand-specific cashbacks and discounts on its Easy EMI or no-cost EMI purchases. Customers who opt for such EMI options get up to 20 per cent cashback on the purchase of television, home theatre systems and camera & lens, from Sony outlets.

Published on October 23, 2021

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