No CV points for govt, utility spends: Axis Vistara credit card devalued

Axis Bank has implemented significant alterations to its Vistara co-branded credit cards, particularly affecting milestone achievements through substantial expenditures.

Starting January 3, 2024, the Axis Bank Vistara Credit Card will undergo specific revisions. Transactions involving government services and utilities will no longer accrue Club Vistara points or contribute to milestone benefits.

These alterations exclude spends in these categories from the calculation of milestone benefits, requiring eligible expenditures within designated time frames for cardholders to avail themselves of these benefits.

Identification of transactions falling under government services and utility categories relies on Merchant Category Codes (MCC) set by networks like Visa and MasterCard, not defined by Axis Bank. Consequently, spends in these excluded categories will no longer count towards earning Club Vistara points in members' Club Vistara accounts, impacting the overall rewards system for Axis Bank Vistara Credit Card users.

"Evaluating usage of features and benefits offered on various credit cards is a periodic or an ongoing exercise. As a part of this exercise, we have made some changes on the Axis-Vistara credit card to exclude certain transaction types from earning rewards to discourage abnormal spending behaviour and drive profitability for the business,"   Sanjeev Moghe, President & Head - Cards and Payments, Axis Bank told Business Standard.

This is what the company said in a release: 

With effect from 3 January 2024, the following revisions will be applicable on the co-branded Axis Bank Vistara Credit Card:

• Government services transactions will not be eligible for earning Club Vistara points and achieving milestone benefits.

• Utility transactions will not be eligible for earning Club Vistara points and achieving milestone benefits.

Government Services include fines, tax payments, NPS payments, postage stamps etc while Telecom/Phone, Computer Network Services, Cable Television/Pay TV or Radio, Electric, Gas, Sanitary, Telephone or Water Utilities come under utility transactions. 

Club Vistara (CV) points are earned by members in their Club Vistara account on regular spends on Axis Bank Vistara Credit Cards. The spends made on the excluded categories will not be considered for earning Club Vistara points.

Is the Axis Vistara credit card still worth it? 

"Even with the exclusion of CV points on utility spends and government service transactions, Axis Vistara still stands as one of the best airline cards. The card’s overall value as a travel credit card remains unaffected. This update, however, will affect consumers’ ability to reach spend thresholds for milestone benefits. Cardholders who usually have hefty utility bills every month may consider other cards that offer a better value-back on those transactions," said Rohit Chhibbar, Head of Credit Cards Business, Paisabazaar.

In August 2023, Axis Bank decided to alter the transfer ratio of edge reward points to its partners. Effective from 1st September 2023, the card also lost its monthly milestone benefit of 25,000 points and has a lower ‘points to miles conversion’. The annual fee of Axis Magnus has also been increased from Rs 10,000 + GST to Rs. 12,500 +GST. 

The most important benefit of Axis Magnus Credit Card was its monthly milestone benefits wherein users could earn 25,000 bonus reward points on reaching monthly spends of Rs. 1 Lakh. This benefit was discontinued from 1 September.

Also, from September 1, the transfer ratio to convert reward points to airlines and hotel loyalty programmes for Axis Magnus cardholders dropped to 5:2, compared to  5:4 ratio earlier. This means for 50,000 reward points, you now get 20,000 air miles, compared to 40,000 miles earlier. 

The monthly milestone benefit was the major USP of this card as high-spenders could accumulate 3 Lakh additional reward points. By transferring the earned reward points to air miles in 5:4 ratio, cardholders could save a substantial amount on their travel spends. However, now if a user continues to spend Rs 1 Lakh per month on domestic spends, they will only be able to earn up to 72,000 reward points on the regular earn rate, as per data analysed by Paisabazaar.

Customers now have to spend more to start to avail the reward points.

"Credit card companies often alter their reward programs to adapt to shifting consumer demands, regulatory adjustments, and competitive market trends. Consumers in India are value-conscious and are looking for rewards that are more relevant to their lifestyle. This is leading credit card companies to shift away from traditional perks and redefine their rewards. Additionally, companies are also leveraging data analytics to personalise rewards, aligning them with consumers' spending habits. These changes reflect the constant effort to remain responsive to the evolving needs and expectations of consumers," said Adhil Shetty, CEO, Bankbazaar.com.