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

Question

Hey everyone, I'm Arjun from Pune, working in IT, take home around ₹68k per month. Applied for a lifetime free credit card from HDFC (Millennia) about 4 months back. The sales guy very clearly told me zero annual fee, zero joining fee, lifetime free. I said okay and got it.

But last month I see some charge on my statement — something like 'annual membership fee' of ₹1000 plus GST. Called customer care and they were not very helpful honestly. Said something about spending threshold not being met?

I had no idea there was a spending condition attached to 'lifetime free'. Nobody told me this during the call. Is this even legal? Can they just charge like this? Also are there other hidden charges I should know about — like forex, cash advance, EMI conversion fees etc? I feel cheated but don't know if I'm overreacting. Has anyone else faced this with so-called LTF cards?

Answer 1

Honestly, you're not overreacting at all. This is one of the most common traps people fall into with 'lifetime free' cards in India.

Here's the thing — 'lifetime free' doesn't always mean unconditional free. Some cards, including certain HDFC variants, waive the annual fee only if you spend above a threshold in the previous year. Like ₹1 lakh annual spend or something similar. If you don't hit that number, they charge you. It's buried in the Most Important Terms and Conditions document (MITC) that nobody reads. Technically legal because it's disclosed — but yeah, the sales team almost never mentions it upfront. That's a genuine mis-selling problem.

What you should do right now: Call HDFC again and specifically say you were not informed about the spend-based fee waiver condition at the time of onboarding. Use the word 'mis-selling'. Ask them to reverse the charge as a one-time goodwill gesture. Escalate to their nodal officer if the first call doesn't work. You can also file a complaint on RBI's Integrated Ombudsman portal — bankingombudsman.rbi.org.in. Banks take those seriously.

Now the other hidden charges you asked about — here's what actually catches people off guard:

**Forex markup**: Usually 2-3.5% on international transactions. HDFC Millennia charges around 3.5%. If you travel or shop on foreign sites, this adds up fast. Niyo Global or SBI's forex cards are better for that.

**Cash advance fee**: Never use credit card at ATM. HDFC charges 2.5% of the amount (minimum ₹500) plus interest from day one — no grace period. Absolute worst way to borrow money.

**EMI conversion charges**: Processing fee of 1-2% plus GST. And the interest rate on credit card EMIs is typically 13-15% per annum. Not terrible but not free either.

**Reward point expiry**: Points expire, usually within 2 years. People forget and lose them.

**Late payment fee**: Slabs go up to ₹1300 for HDFC. And once you miss a payment, your interest kicks in at 3.6% per month — that's 43% annually. Brutal.

My honest recommendation: Get the current charge reversed first by escalating properly. Then if you want a genuinely no-condition lifetime free card, look at SBI SimplyCLICK LTF or Axis Ace — both have cleaner terms. Keep the HDFC one only if you'll comfortably cross the spend threshold every year.

Answer 2

I'll push back slightly on one thing Rajan said — don't be too quick to ditch the HDFC Millennia if the charge gets reversed.

But first, your immediate problem. Yes, call and escalate. Yes, mention mis-selling. That part is correct. However — and this is what most people get wrong — when you call, don't just ask for a reversal. Ask them to send you the exact clause in writing, via email. Get it documented. If they reverse the charge verbally and then charge you again next year, you'll have no proof of anything.

Now here's my different take: the 'lifetime free' marketing in India is genuinely misleading, but HDFC isn't the worst offender. Some co-branded cards from fintech companies — certain BNPL cards, some newer app-based cards — have even murkier fee structures. At least HDFC's MITC is findable on their website.

The real issue is people picking cards based on the salesperson's pitch instead of reading the MITC themselves. I know it's boring. But it's 4-5 pages, not 40. SEBI's pushing for cleaner disclosures in mutual funds — RBI should honestly do the same for credit card fees, it's long overdue.

For truly no-strings lifetime free options: IndusInd Platinum card, Kotak 811 credit card, or Amazon Pay ICICI if you shop on Amazon regularly. These don't have hidden spend-based fee reversal conditions.

Spend threshold cards are fine if you already spend enough organically — don't change your spending habits just to avoid a ₹1000 fee, that's backwards logic. But if your monthly card spend is under ₹8-10k typically, just get a simpler card and stop worrying about it.