It’s raining devaluations for credit card users. Major issuers such as HDFC Bank, American Express, SBI Card and ICICI Bank have reworked their credit card reward structures over the past two months, cutting back benefits on some of their most sought-after premium cards.
Last week, HDFC Bank said that starting in the next financial year, Infinia cardholders must spend at least ₹18 lakh annually or maintain a total relationship value—the cumulative worth of all accounts, investments and loans with the bank—of ₹50 lakh to retain the card.
This change came on the heels of American Express devaluing milestone-based rewards on one of its popular cards, Amex Platinum Travel. Around the same time, ICICI Bank removed accelerated rewards on Amazon Pay and Swiggy vouchers for its premium Emeralde Private card, a competitor to Infinia. Lounge favourite Scapia, issued in partnership with Federal Bank, and most cards offered by SBI Card introduced restrictions to lounge access.
Beyond premium cards, there have been changes in even entry-level and low-cost variants, including reduced cashback rates, monthly caps on rewards and the introduction of spending-based criteria for lounge access or annual fee waivers.
What is driving the sudden wave of devaluations?
Ajay Awtaney, founder and editor of LiveFromALounge.com, said periodic devaluations are part and parcel of the credit card business, but the scale and frequency have increased lately because product economics are under pressure.
“Every credit card product runs on a projected P&L (profit and loss) statement. The issuer makes assumptions about customer spending patterns, reward redemption rates, revolver behaviour (interest-paying customers) and the cost of benefits being offered. Banks review these assumptions periodically and tweak or withdraw benefits if they don’t hold true,” he explained.
Responding to Mint’s queries on the recent revisions, American Express said it regularly reviews its card offerings. "Following a recent review, we have updated the structure of annual spend milestone benefits on Platinum Travel credit card and automated the crediting of milestone Membership Rewards points to provide greater clarity,” the company added.
Queries sent to other banks that have announced changes in their reward structures did not elicit a response.
When rewards outpace revenue
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.
As for the second income stream, the pool of customers who carry their balance month-to-month and pay interest has been shrinking. SBI Card, the second-largest credit card issuer and the only standalone listed player in the segment, has seen its revolver share decline from about 38% pre-covid to roughly 23% in FY26.
The third stream of interchange income is a steady source but not enough to offset the rising cost of premium rewards.
At the same time, costs are rising for banks and credit card. Inflation and currency movements are pushing up the price of card-linked benefits such as international airport lounge access and global loyalty point transfers.
“Many of these partnerships with airlines and hotel loyalty programmes are contracted in US dollars, which adds pressure when the rupee weakens,” said Awtaney. “What customers call a devaluation is often the bank accounting for higher vendor costs or forex movements. Banks can absorb it for some time, but when it scales up, they have to recalibrate.”
Gaming the system
Another structural shift is customer behaviour. More users are maximising benefits than banks had projected, aided by growing awareness and online communities that track reward hacks and accelerated reward categories. Accelerated rewards allow cardholders to earn points at a significantly higher rate (5x or 10x the base rate) on specific spends, such as vouchers of e-commerce platforms and select online brands.
Some users have found ways to game the system. Buying gold coins online earns accelerated rewards on certain premium credit cards. Since gold coins can be resold at prevailing market prices, some cardholders began purchasing them in bulk primarily to accumulate reward points.
They would then sell the coins to jewellers and recover most of the purchase value. The resale option reduced the financial risk, enabling large transactions for the sake of earning rewards rather than for actual consumption.
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. Most banks have capped rewards on Amazon Pay vouchers at monthly spends of ₹10,000-12,000.
“The bank launches co-branded credit cards or announces accelerated rewards on vouchers of certain brands with the assumption that 20-25% would be spent on those brands, while the rest would be on other regular spends. Similarly, assumptions are made for travel credit cards that allow reward redemption through loyalty programmes. But when a majority of credit cardholders start concentrating spending in high-reward categories or drive up redemptions, the product becomes lopsided,” said Siddharth Mehta, co-founder of Kiwi, a fintech company that issues UPI-based credit cards. “At this point, the bank has to step in and course correct. So, banks are not doing devaluations because they like it, they are just protecting the portfolio when the assumptions break.”
Lounge access: biggest casualty
Among all the benefits, the sharpest pullback is in airport lounge access. Lounge usage through cards has increased dramatically post-covid, making it a leaking bucket for banks, according to an official at a major private bank’s credit card division.
“Lounge visits per active card rose two-three times above projections based on past years. It has become a lossmaking proposition for us after accounting for the costs,” the official said on condition of anonymity.
Mehta noted that unlike reward points that are accrued after a customer spends on the card, lounge access entails a fixed cost for the issuer every time it is used.
“Lounge access doesn’t necessarily drive incremental spending. It may influence a customer’s choice of card, but beyond that it doesn’t generate revenue,” he said. “If a card is used primarily for complimentary lounge visits and not for regular transactions, the per-unit cost for the issuer rises.”
To address this, most banks have introduced minimum spend criteria, particularly on entry-level, cashback and lifetime free cards, to unlock a limited number of complimentary lounge visits.
Scapia, the most sought-after card for lounge access, 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. In December, SBI Card cut complimentary domestic lounge access on five popular cards from eight visits a year to four (one per quarter).
Over the past two years, issuers such as HDFC Bank, ICICI Bank and Axis Bank have introduced quarterly spend thresholds, typically ranging from ₹50,000 to ₹1 lakh, on several cards to make customers eligible for free lounge visits.
How to see devaluations
Experts said devaluations are part and parcel of credit card usage. As per Reserve Bank of India regulations, banks must give cardholders a minimum 30-day notice before changing their offerings. So, when your favourite credit card is devalued, you should use that window to evaluate whether the perks on the card still outweigh the annual fee. Instead of chasing multiple perks, Awtaney suggests keeping a focused card portfolio.
“Most users can manage with two to four cards: one primary card that rewards regular, recurring spends, possibly one co-branded card aligned to frequent travel or shopping habits and if needed, a specialized card for focused categories such as fuel or dining,” he said.
When a card in your portfolio is significantly devalued, you can divert spends to another card that offers similar benefits or apply for a more suitable card while discontinuing the devalued one if it no longer justifies its fee.
Say your primary goals are lounge access and cashback. If the lounge card increases its spending threshold and most of your transactions are routed through a cashback card, you may choose to shift incremental spending to meet the new lounge criteria, or evaluate whether paying separately for lounge access makes more sense than altering your spending pattern.
The key, experts said, is not to force spending simply to unlock benefits.
“Consumers should pick cards based on their natural spending behaviour, not change spending just to earn points. If a card no longer aligns with how you naturally spend, it may be better to downgrade to a lower-fee variant or exit altogether, rather than stretching to meet milestones,” Mehta said.