Major credit card issuers including HDFC Bank, American Express, SBI Card and ICICI Bank have reworked their reward structures over the past two months, cutting back benefits on premium cards. According to reports from Mint, HDFC Bank announced that starting in the next financial year, Infinia cardholders must spend at least ₹18 lakh annually or maintain a total relationship value of ₹50 lakh to retain the card. This change followed American Express's devaluation of milestone-based rewards on the popular Amex Platinum Travel card and ICICI Bank's removal of accelerated rewards on Amazon Pay and Swiggy vouchers for its premium Emeralde Private card. As per Mint, these devaluations represent a significant shift in how banks approach premium card benefits, with issuers now requiring substantially higher spending thresholds to maintain elite status.
As reported by Mint, banks make money through three primary streams: annual membership fees, interest from customers who carry balances, and interchange income. However, SBI Card's revolver share has declined from about 38% pre-covid to roughly 23% in FY26, limiting the second income stream. The third stream of interchange income is steady but insufficient to offset rising costs of premium rewards. Ajay Awtaney, founder of LiveFromALounge.com, explained that banks review assumptions about customer spending patterns and reward redemption rates periodically, tweaking benefits when projections don't hold true. According to Mint, banks make money on credit cards through three primary streams: annual membership fees, interest from customers who don't pay in full, and interchange or merchant discount rate income on every swipe. In premium cards, however, annual fees are often offset with welcome benefits given out in the form of vouchers or reward credits, limiting that income stream.
According to Mint, lounge access has experienced the sharpest pullback among all benefits. Scapia card recently doubled the minimum monthly spend required to qualify for lounge access to ₹20,000 from ₹10,000 earlier, and excluded utility payments from counting toward the milestone. SBI Card cut complimentary domestic lounge access on five popular cards from eight visits a year to four (one per quarter) in December. Over the past two years, issuers have introduced quarterly spend thresholds ranging from ₹50,000 to ₹1 lakh to make customers eligible for free lounge visits. As per Mint, lounge usage through cards has increased dramatically post-covid, making it a leaking bucket for banks. An official at a major private bank's credit card division noted that lounge visits per active card rose two-three times above projections based on past years, making it a lossmaking proposition for issuers after accounting for costs.
As reported by Mint, more users are maximizing benefits than banks had projected, aided by growing awareness and online communities tracking reward hacks. Some customers have found ways to game the system, with users purchasing gold coins online for accelerated rewards and then reselling them to jewellers, and others buying Amazon Pay vouchers worth several lakh rupees monthly purely for points accumulation. Most banks have capped rewards on Amazon Pay vouchers at monthly spends of ₹10,000-12,000 to address these practices. According to Mint, there was a similar trend with Amazon Pay vouchers, which qualify for accelerated rewards on most premium cards. Some users began purchasing vouchers worth several lakh rupees each month, sometimes on behalf of friends and family, purely to accumulate points. As such practices and general reward maximization increased, banks responded by introducing monthly caps on accelerated rewards in high-multiplier categories such as gift cards and shopping vouchers.
According to Mint, experts recommend keeping a focused card portfolio of two to four cards based on natural spending behavior rather than forcing spending to unlock benefits. Siddharth Mehta, co-founder of Kiwi, suggests maintaining a primary card for regular spends, possibly a co-branded card for frequent travel or shopping, and a specialized card for focused categories. When a card is significantly devalued, users should evaluate whether the perks still outweigh the annual fee and consider shifting spending patterns or applying for more suitable alternatives. As per Mint, when your favourite credit card is devalued, you should use the minimum 30-day notice period to evaluate whether the perks on the card still outweigh the annual fee. Instead of chasing multiple perks, experts suggest keeping a focused portfolio and choosing cards based on natural spending behavior, not changing spending just to earn points.