Banks are implementing gradual tightening of credit card benefits as rising costs and lower spending by some users are affecting profitability, according to Zee Business sources. Industry executives report that several customers are taking multiple credit cards mainly to avail benefits such as airport lounge access, travel offers, reward points and lifestyle discounts, while using the cards only for limited transactions. This trend has prompted banks to review their reward structures and may link benefits to higher spending thresholds and active card usage, with several banks already revising reward programmes over the past few months and issuing notifications about changes in reward point redemption, lounge access rules and other benefits.
Airport lounge access has emerged as one of the major areas under review, with industry estimates showing that a customer may spend only a small amount to activate lounge access, but the actual cost borne by the bank for every lounge visit can be significantly higher. As a result, many lenders have already introduced spending conditions for lounge access, requiring customers to spend a certain amount on their cards during a quarter or month before becoming eligible for the facility. Some premium benefits, including complimentary golf sessions and lifestyle privileges, have also been reduced by several issuers, with example changes showing customers previously receiving complimentary airport lounge access immediately after obtaining a card, now needing to spend ₹50,000 or ₹1 lakh during a specified period before becoming eligible for the benefit.
The most effective defense against credit card devaluation involves regular reward redemption rather than accumulating points for extended periods. As reported by Mint, issuers may revise redemption values, introduce expiry rules, or reduce available options, making held points vulnerable to future programme changes. Cardholders should consistently use points for travel, cashback, vouchers, or other benefits to maintain their value. Additionally, diversifying reward strategies by using credit cards with complementary benefits or flexible reward programmes can help sustain better value and avoid being affected by single devaluations. This approach becomes particularly important as several banks have started introducing minimum spending requirements to unlock benefits, with customers needing to spend specified amounts every month or quarter to receive airport lounge access, reward points or other premium services.
Cardholders should review annual fees against actual benefits to ensure premium cards deliver genuine value creation. According to Mint, this involves assessing whether promised rewards, points, offers, and privileges outweigh associated costs through yearly spending analysis, rewards earned, and benefits procured. Monitoring issuer updates and policy changes through regular communications via text messages and emails is crucial for understanding changes in earnings rates, fees, usage methods, restrictions, or redemption conditions before they impact spending plans and wealth-saving strategies. The focus is shifting towards profitable customers, responsible spending and sustainable reward programmes, with banks gradually moving away from the strategy of offering free cards and heavy benefits to attract customers.
Aligning spending with highest-value categories can maximize credit card benefits significantly. As reported by Mint, many cards offer enhanced rewards on specific categories such as travel, dining, shopping, or fuel, and cardholders should understand their card's rewards structure to focus spending on areas where maximum benefits can be earned. This strategic approach helps maintain value and avoid using cards without a clear spending strategy, which can expose users to devaluation risks. Banks have observed that some consumers hold several credit cards mainly to take advantage of discounts offered on e-commerce platforms, food delivery applications and travel bookings, with actual spending on these cards remaining limited, which increases the cost burden on lenders without generating adequate revenue.
