Suppose you have Rs. 5000 pending on another card (say Citibank), and you want to pay this amount from your HSBC card, here is what you would do:
- Make sure that your HSBC card is clean and you don’t have to pay them anything, prior to making this BT request.
- Go ahead with calling them up and re-ensuring there is nothing to pay there. Give them your Citi card number and the amount (5000).
- Take care to not use your HSBC card anywhere until the end of 3 or 6 months (whatever tenure you selected).
- As soon as you get the draft – deposit it with Citibank.
Here’s what’s in store for you now. You see these charges on your next month’s statement of your HSBC card:
19NOV 19NOV BALANCE TRANSFER BTW 5000.00
TRF FRM CITI BANK CC # XXXX XXXX XXXX XXXX
20NOV 20NOV BT Processing fees IN 249.00
20NOV 20NOV Service Tax + [email protected] IN 30.83
Seems fair enough? Well, they did tell you that there would be a BT fees (for a transfer for 3 months). Now here’s what they did not tell you (in your next statement):
OPENING BALANCE 5279.83
03JAN 01JAN Your Name VisaMoneyTXFR IN 300.00CR
12JAN 12JAN FINANCE CHARGE 16.74
12JAN 12JAN "SERVICE TAX+CESS"@12.36% 2.06
Wow, there is a finance charge of Rs.16.74 (~17) and another Rs. 2 STT! HSBC had charged you a Processing Fee in the previous month’s statement (look at the first snippet above). Now, here are the rules from HSBC:
- Any payments you make (minimum due) would go towards completing the BT amount first.
- As the Processing Fee was charged after the BT was given out, it’s considered as a shopping on your card.
- Until you repay the whole 5000, there would be finance charges on that Rs. 249+30.83 @36% compounded p.a., every month.
- As the system counts any payments only towards the BT, these finance charges will attract interest next month too.
- So, here’s the total money you’d shell out for your 90 day BT:
(249+30.83) + (16.74+2) + (17.48+2) = 318.05
Considering the BT amount to be 5000, this money wasn’t much. But if you did any larger transaction – you’ll be paying much more money.
Call up Customer Care and ask them to reverse these charges.
This weird system is not mentioned any where in their Terms (as of date) and also they can’t fool customers with small figures.
If the officer refuses to budge, tell them to transfer call to someone senior. If it doesn’t help, drop a comment here and let’s make sure they mend their system.
I read this column and appreciate your effort for giving more awareness about hidden charges in case of BT. I am not in agreement with you. HSBC has already mentioned about charges online and if you call up HSBC officer, they will explain you the whole things about BT. I don’t know, but I think, u must have messed up with a HSBC guy who didn’t have good sleep last night :) .
Even I have done BT from CITIBANK to HSBC and whatever charges they have imposed on me is valid one and already mentioned in “Terms and Conditions”.
Thanks. May be you missed a point. We’re talking about 3 month Balance Transfer here. According to a 90 day BT process, they don’t charge you anything for another 90 days and you just have to pay 5% (minimum due).
Just in case you are under a 6 month or 12 month BT tenor, you would be actually going to pay 0.75% or 0.5% respectively every month thereafter. Even in those cases, you should be on a look out that they are not including your processing fee while computing the 0.75% or 0.5% finance they are charging.