HDFC appears to have once again crafted a targeted credit-card offer that plays to its strengths. In collaboration with VISA, HDFC is rolling out a limited promotion: a flat 1% cashback on the foreign-currency markup fee for international point-of-sale (POS) transactions made with HDFC credit cards (VISA variants only). This promotion primarily benefits travelers and cardholders who make in-person purchases abroad; it does not apply to most routine online international transactions.
Foreign Currency Markup Fee on International Spending
For context, the foreign-currency markup fee is an add-on charged by banks for card transactions made in a currency other than the card’s billing currency. Many Indian banks charge around 3.5% on such transactions, which effectively increases the cost of purchases made overseas. In some other markets, competing cards offer 0% markup, but in India this charge remains common due to limited competition in this area. The details of HDFC’s cashback promotion are outlined below.
Terms & Conditions for 1% Cashback:
- Flat 1% cashback is offered on the foreign-currency (FCY) markup charged on eligible international spends.
- The offer applies only to international POS transactions made in person abroad.
- Online international spends (purchases on overseas websites) are excluded from this promotion.
- Cashback will be credited to eligible customers within 60 days from the promotion end date.
- Maximum cashback per card during the promotion is capped at Rs. 1,000.
- The offer applies only to genuine FCY transactions and does not apply to Dynamic Currency Conversion (DCC) transactions.
- Promotion period: 01 July 2016 – 31 August 2016.
I personally use the HDFC Business Regalia card for its comparatively lower markup fee (2%), so this specific promotion does not help me much since my international spending tends to be online rather than in-person. However, for cardholders planning overseas travel who expect to make POS purchases, the offer can reduce a small portion of the markup cost.
Example calculation:
- If you spend $1,000 abroad and the equivalent value is about Rs. 67,000.
- With a 3.5% foreign-currency markup, the markup would be roughly Rs. 2,345, plus applicable service tax.
- A 1% cashback on the markup equates to around Rs. 23, which is a modest saving.
The published “1%” figure can be misleading if interpreted as 1% of the total transaction value; based on the example above it appears to mean 1% of the markup fee itself, which yields a relatively small absolute benefit. Another interpretation could be that the bank is offering a partial refund of the markup (for example, 1% of the total spend), but the exact mechanics can be unclear without seeing the transaction posting and cashback calculation on a real statement. As customer-care explanations are sometimes inconsistent, the definite outcome will be evident only after using the offer and seeing how the cashback posts.
Have you used this offer during travel? Share your experience and comments below.