Credit cards on a devaluation spree: How to still maximise benefits

As issuers shift from universal rewards to usage-linked models, customers face a wave of devaluations and fee hikes that demand a more strategic approach to spending

Credit card companies are tightening terms for lounge access, insurance and reward points, shifting from broad and easy benefits towards more restrictive, usage-linked structures.

 

Data compiled by fintech BankBazaar.com from issuer disclosures and customer notices shows a pattern of steady devaluation rather than occasional cuts.

 

“The recent wave of credit card revisions signals a reset in the rewards system,” said Adhil Shetty, chief executive officer of BankBazaar. “Issuers are moving away from flat cashback models towards structures that are more closely linked to spending behaviour.”

 

SBI Card

 

SBI Card has introduced multiple changes, according to customer notices. The changes include:

 

 

• Airport lounge access revised (effective January 10, 2026): Domestic lounge benefits have been restricted for select SBI and Tata co-branded cards, with tighter usage limits
• Reward points clawback accelerated (from January 15, 2026):
• Cashback-linked reward reversals now processed within 90 days
• Instant discount-linked reversals within 120 days
• Air accident insurance withdrawn (from July 15, 2025): Rs 1 crore complimentary cover removed on premium cards such as SBI Card Elite and Miles Elite

Higher spending thresholds: Annual fee waiver on BPCL SBI Credit Card increased from Rs 50,000 to Rs 1 lakh

Portfolio rationalisation: Select co-branded cards, including Etihad Guest and OLA Money variants, have been discontinued

 

These changes collectively reduce the overall value proposition, especially for users who relied on bundled premium benefits.

 

American Express

 

American Express India has also tightened its rewards framework.

 

Fuel transactions excluded (effective June 12, 2025): Cardholders no longer earn Membership Rewards points on petrol, diesel, or CNG spends

 

These transactions still count towards milestone-based bonuses, but yield zero base reward points

 

This is a significant shift, given that fuel has traditionally been a high-frequency spending category for many users.

 

Axis, HDFC and ICICI

 

HDFC Bank, Axis Bank and ICICI Bank have not published consolidated devaluation notices on public pages. The changes are being implemented through:

 

Direct customer communication: SMS and email updates on revised charges and benefits

 

Updated MITC documents: For example, Axis Bank has tightened rules around forfeiture of unredeemed reward points upon card closure (effective October 2025)

 

Incremental fee and condition adjustments: Including revised charges and usage thresholds communicated individually to cardholders

 

This fragmented disclosure makes it harder for users to track changes unless they actively review communications.

 

From benefit-led to behaviour-led cards

 

“We are now seeing a shift from benefit-led cards to behaviour-led cards, where rewards depend on how and where you spend,” Shetty said.

 

“This means users need to be more mindful and optimise across categories,” he added.

 

The implication is clear: passive usage no longer delivers meaningful rewards. Instead, returns depend on aligning spending with issuer-defined categories and thresholds.

 

Rise of ecosystem-driven cards

 

As generic rewards weaken, issuers are pushing co-branded and ecosystem-linked cards more aggressively. These cards concentrate value within specific platforms:

 

Airline cards (e.g., Etihad-linked variants earlier offered by SBI Card) reward frequent flyers

 

Fuel cards (such as BPCL SBI Credit Card) incentivise spending within partner networks

 

Platform-based cards tied to e-commerce or mobility apps aim to lock users into specific ecosystems

 

While some of these have also seen benefit cuts or discontinuation, the broader strategy remains intact: deepen engagement within controlled ecosystems rather than offer universal rewards.

 

Despite the devaluation trend, value has not disappeared — it has become more conditional.

 

“There are still cards that offer simpler cashback, which can continue to provide value,” Shetty noted.

 

In the current environment, users can consider:

 

Low-complexity cashback cards: Offer predictable returns without category tracking

 

Category-focused cards: Useful if spending is concentrated (e.g., travel, fuel, online shopping)

 

Limited multi-card strategy: Combining 2–3 cards to optimise across categories

 

However, chasing rewards by overspending or signing up for multiple high-fee cards can negate any gains.

 

What should cardholders do now?

 

With changes becoming frequent and less visible, users need to actively manage their credit card portfolio:

 

• Review official notices and issuer communications regularly
• Recalculate effective reward rates after caps and exclusions
• Track whether spending meets revised thresholds for benefits
• Exit cards where annual fees outweigh actual returns