After losing two precious years to the Covid pandemic, e-commerce sites, lenders and card issuers have come out all guns blazing in the 2022 festive season. Consumers too seem excited to shop. Starting with Navratri, now it’s the turn of Dhanteras, Diwali, Bhai Dooj, Christmas and then ultimately New Year. Clearly, Indians have many reasons to celebrate. Coinciding with different festivals and periods, various shopping offers have been rolled out to entice buyers. Here is a lowdown on the different type of deals on offer and their pros & cons.

Cashback offers

Have you come across promotional email messages or phone notifications about 'up to 10% cashback' or '10% instant cashback*' from e-commerce sites or card companies? You are not alone. Such cashback deals are usually conditional and up to a certain absolute value. For the uninitiated, cashback means money awarded in the customer’s card account under a scheme. For instance, there is a 10 per cent cashback on HDFC Bank cards on minimum spends of ₹7,500 on LifeStyle stores or www.lifestylestores.com website transactions. The maximum cashBack is ₹1,000 on HDFC Bank credit card and ₹750 on HDFC Bank debit card. In case of SBI Card tie-ups with certain companies, sometimes the minimum transaction value to get a cashback can go up to ₹30,000.

Festive cashbacks offers also come through co-branded credit cards. For instance, the Flipkart Axis Bank credit card cashback proposition. But the quantum of cashback can differ as per merchant type (Flipkart & Flipkart entities 5 per cent, preferred merchants 4 per cent and all other merchants 1.5 per cent). Do note that cashback is not applicable for fuel spends, purchase of gift cards, EMI transactions, purchases converted to EMI post facto, etc.

For any cashback offer accessed through a credit card, you must remember that any remaining cashback can immediately cease to be valid in the event of cancellation of the credit card or a default by you.

Discount on EMI

For certain festive offers, including product categories such as mobiles, grocery, etc., card companies, in pacts with certain e-commerce companies, offer discount per card on EMI transactions. To lure customers, the amount of discount is higher on EMI transactions compared to non-EMI transactions. For instance, in case of mobiles, the max discount on EMI transactions can be ₹1,750 compared to ₹1,250 on non-EMI transactions. While there is no limit on the number of transactions under such schemes, generally you can avail up to a maximum discount per Card for the offer duration. Maximum discount per card is calculated as cumulative savings across all eligible platforms.

Customers should note that EMI transactions may incur extra charges such as 'convenience fees' plus GST for successful transactions at select merchants. Additionally, the interest cost can either be borne by merchant or by the customer. These terms and conditions are explicitly mentioned So, it would be best if they compared the extra discount claimed to be given by the card company with the extra money they will shell out. Not all cards issued by a card issuer may participate in a discount on EMI scheme. Similarly, the marketing programme is usually to push the sales of particular products. For instance, Apple iPhone 14, iPhone 14 Pro, iPhone 14 Max and their variants are excluded from some campaigns.

Loan fee waivers

PNB, ICICI Bank, Union of Bank and Central Bank etc. have lined up waiver of processing fees or deals. Union Bank has announced a waiver on processing charges under Union Home (including takeover) and Union Miles Scheme till 31.01.2023.

For those using digital channels to apply for a home loan and car loans, certain banks are getting a concession. Additionally, some lenders will not be charging legal and valuation charges on takeover of home loans from other banks and financial institutions.

Some private sectors banks are offering discounts on luxury goods as well on e-commerce platforms. Do note, such offers are limited to certain period, and vary with categories. The schemes are applicable when you use the particular bank's debit/credit card, opt for no-cost EMI to finance purchases.

Typically, processing fees as a part of a loan is extremely small. However, as a marketing ploy, such discounts are quite popular amongst borrowers because of the obsession for discounts. Don't make borrowing decisions based on fee waivers, or small tweaks in cost reduction.

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