Axis Bank credit card rules change: What gets costlier from Aug 28

From higher overseas transaction costs to revised late fees and reward exclusions, Axis Bank cardholders face several changes from August 28

Axis Bank credit card users will pay a higher cost on certain overseas transactions from August 28, with the lender raising the dynamic currency conversion (DCC) markup on several cards from 1.5 per cent to 3.5 per cent. The bank is also increasing the top late-payment fee to Rs 1,300 and withdrawing rewards or cashback on bridge fees, road fees and toll transactions.

 

The changes, detailed in Axis Bank’s revised credit card terms, will depend on the card variant. For example, the DCC markup for Magnus and Magnus for Burgundy is being revised to 2 per cent, while Olympus will have a separate 1.8 per cent rate.

 

 

For customers, the key issue is not simply the increase in charges. Some of the changes could reduce the value of credit card rewards and make certain spending strategies less useful.

 

Overseas spending could become more expensive

 

DCC is offered when an overseas merchant, website or ATM gives a customer the option of paying in Indian rupees rather than the local currency.

 

Under the revised terms, the DCC markup for most affected cards will rise to 3.5 per cent from 1.5 per cent. Axis Bank's existing terms describe DCC as applicable when an international transaction is processed in Indian rupees, including certain transactions with overseas-registered merchants in India.

 

For instance, if an eligible transaction is equivalent to Rs 1 lakh and the customer chooses DCC, a 3.5 per cent markup would amount to Rs 3,500 before applicable taxes. Under the earlier 1.5 per cent rate, the markup would have been Rs 1,500.

 

This is different from the normal foreign-currency transaction charge. With a foreign-currency transaction, the purchase is made in the local currency and converted into rupees through the card network. With DCC, the merchant converts the transaction into rupees at the point of sale.

 

When given a choice overseas, paying in the local currency is generally preferable to accepting DCC. The normal foreign-currency charges applicable to the card can still apply.

 

Late-payment fee rises for large outstanding balances

Axis Bank is also revising its late-payment fee structure.

 

The bank says the fee for outstanding balances below Rs 50,000 will remain unchanged. For balances of Rs 50,000 and above, the revised fee is Rs 1,300. Its published slab, however, lists Rs 1,200 for dues from Rs 10,001 to Rs 50,000 and Rs 1,300 for amounts above Rs 50,000.

 

The revised slabs are:

 

• Below Rs 500: Nil
• Rs 501-Rs 5,000: Rs 500
• Rs 5,001-Rs 10,000: Rs 750
• Rs 10,001-Rs 50,000: Rs 1,200
• Above Rs 50,000: Rs 1,300

 

This means a customer carrying a large unpaid bill could face an additional Rs 100 compared with the earlier top fee.

 

For credit card users, however, the bigger financial risk remains the interest charged on unpaid dues. Avoiding a late fee should not be treated as the only reason to pay the full bill on time.

 

Rewards will disappear on toll and road payments

Axis Bank is also tightening reward eligibility.

 

From August 28, no rewards will be earned on spending classified as bridge fees, road fees and tolls. Gift card purchases will continue to be excluded from rewards and will not count towards spending-based fee waivers or milestone benefits. The bank is also moving gift card transactions from the broader 'Wallet' category to a separate 'Gift Card' category.

 

This matters for customers who use their credit cards strategically to reach annual spending thresholds.

 

For example, a cardholder who previously relied on toll payments or eligible gift-card purchases to build towards a milestone will no longer be able to assume that such transactions will help them reach the required spending level.

 

The lesson is to calculate the value of a card based on eligible spending, rather than total spending.

 

How partial payments will be adjusted

 

Axis Bank has also specified the order in which a payment will be adjusted when a customer does not clear the entire outstanding amount.

 

According to the revised terms, payments will first be adjusted towards applicable fees and charges, including taxes, followed by EMIs, interest charges, purchase transactions and cash advances.

 

This makes partial repayment particularly important for customers who are already carrying different types of outstanding dues. Simply paying a part of the bill does not mean that the payment will necessarily reduce the component a customer expects it to.

 

What should Axis Bank cardholders do?

 

The changes do not make every Axis Bank card more expensive in the same way. The exact impact depends on the card variant and how the card is used.

 

Customers should therefore:

 

• Check the revised terms applicable to their specific card.
• Choose the local currency rather than rupees when offered DCC abroad.
• Pay the full credit card bill by the due date wherever possible.
• Stop assuming toll, road or bridge payments will help earn rewards.
• Exclude gift-card purchases when calculating milestones or fee-waiver spending.
• Review whether the card's annual fee is justified by the benefits they actually use.

 

For frequent international travellers, the DCC revision is the most immediate change to watch. For other users, the reduction in reward-earning opportunities may matter more over the year.

 

Axis Bank's revised terms take effect from August 28, but card-specific changes can differ. Customers should rely on the notice applicable to their particular card rather than assuming that every revision applies uniformly across the bank’s credit card portfolio.