Lifetime free credit card but still getting charged? What's going on?

Question

Hi everyone, I'm Pooja, working in Pune, salary around ₹52k in hand. I applied for a lifetime free credit card from HDFC (Millennia) about 6 months ago because the agent specifically said 'no annual fee ever'. But last month I saw a ₹500 charge on my statement and when I called customer care they gave some vague answer about 'value added services' or something.

I'm not even sure what services they're talking about — I never opted for anything extra. Also I've heard some LTF cards suddenly become chargeable if you don't spend a minimum amount in a year? Is that true?

Also there's this ₹18 GST being added on every late payment and interest charge — that's expected right? Or is that also something I should dispute?

Basically I want to understand — what are all the hidden ways these 'lifetime free' cards actually charge you? I feel like I was misled. Has anyone else faced this? How do you handle it?

Answer 1

Honestly, this happens to so many people and the frustration is completely valid.

So first — 'lifetime free' strictly means no annual or renewal fee. That's it. It does NOT mean the card is free of every possible charge. Banks are very careful about this wording and they're technically not lying, but they absolutely bank on you not reading the fine print.

Here's the thing — the most common hidden charges on LTF cards in India:

**1. Add-on service enrollments**
This is probably what hit you. Agents often auto-enroll you in things like HDFC's SmartPay or credit shield insurance during the application call. You may have 'consented' without realizing it. Check your statement for exact description of that ₹500 charge and call back demanding a specific explanation and reversal. Be firm. Most banks reverse it once if you push.

**2. Minimum spend clause**
Yes, this is real but it's more common with premium cards. For Millennia specifically, HDFC hasn't enforced a spend-based fee conversion that I know of — but always check your Most Important Terms and Conditions (MITC) document. It's sent to your email when card is issued. Search your inbox.

**3. Forex markup**
If you ever shopped on international sites like Amazon US, there's a 3.5% forex markup plus GST. Adds up fast.

**4. Fuel surcharge**
Transactions at petrol pumps below ₹400 or above ₹5000 attract 1% surcharge. Most people don't notice.

**5. Cash advance fees**
Withdrawing cash on credit card is brutal — 2.5% fee plus interest from day one. Never do this.

**6. GST on all fees and interest**
Yes, 18% GST on late payment charges, interest, processing fees — all of it. This is legitimate and mandated, not a bank trick. You can't dispute that part.

What you should do right now — call HDFC, ask specifically what that ₹500 was for, and request reversal if you never opted in. Also send a written complaint via their portal so there's a paper trail. If they don't resolve it in 30 days, escalate to RBI's Banking Ombudsman through the CMS portal — bankingombudsman.rbi.org.in — banks take that very seriously.

Go get that ₹500 back. Don't let it go.

Answer 2

Pooja, Usha's covered the charges well but I want to push back slightly on one thing — I don't think HDFC Millennia is the real issue here. The real issue is that lifetime free cards from private banks are almost always a compromise.

I've had better luck with credit union-backed or PSU bank LTF cards. SBI SimplyCLICK is genuinely low on hidden charges and the customer care actually explains things clearly. Same with BPCL SBI Card if you drive a lot.

Here's my actual experience — private banks like HDFC and ICICI have very aggressive feet-on-street agents who earn commission per card issued. They will say whatever gets you to sign. The MITC document you technically agreed to is 20 pages long. Nobody reads it. Banks know that.

For that specific ₹500 charge — it's almost certainly 'Credit Shield Plus' or something similar, an insurance add-on. It's opted-in by default sometimes during tele-verification calls and the agent speaks so fast you don't even register that you said yes to it.

My recommendation: dispute it, get it reversed, then actually go through your card's fee schedule on HDFC's website. Download the MITC. I know it's boring but one hour of reading saves you from years of surprise charges.

Also check if there's a lounge access charge if you used airport lounges beyond the free quarterly limit — that's another sneaky one on Millennia.

Bottom line: LTF just means no renewal fee. Budget ₹500-1000 a year for miscellaneous charges even on 'free' cards, or switch to SBI SimplyCLICK which is genuinely cleaner in my experience.