The Silent Devaluation of Rewards
In the first half of 2026, major Indian banks including HDFC Bank, SBI Card, ICICI Bank, and Axis Bank made significant cuts to their credit card reward programs. This isn't a coincidence but a market correction. For years, banks competed by offering
generous rewards, but rising costs and an increase in disciplined customers who pay their bills in full have made these programs less sustainable. As a result, banks are 'recalibrating' rewards. This happens in several ways: lowering cashback caps, increasing the spending required for perks like lounge access, removing travel transfer partners, and increasing the number of points needed for a specific redemption. For example, SBI Card reduced its monthly cashback cap from ₹5,000 to ₹4,000 and introduced redemption limits. Axis Bank removed key airline and hotel partners from its travel portal. These changes mean that the points you are saving could be worth less tomorrow than they are today.
Conducting Your Annual Points Audit
To protect your accumulated value, you need to know exactly what you have. A simple audit is the first step. Start by creating a master list of all your credit cards and their current points balances. You can find this information on your monthly statements or by logging into your bank’s mobile app or net banking portal. Next to each balance, note down any expiry dates. Most points expire within 12 to 36 months, and losing them is the ultimate devaluation. The most critical step is to calculate the 'Rupee per Point' value. Don't assume 1 point equals ₹1. To find the real value, check the rewards portal for a common item, like a ₹1,000 Amazon voucher. If it costs 4,000 points, your point value is ₹0.25 (1000 ÷ 4000). Do this for a few different redemption options like cashback, travel, and merchandise to understand the best and worst ways to use your points.
To Redeem or To Hold? Making the Call
Once your audit is complete, you face the main decision: use your points now or save them for a bigger goal. There is no single right answer, as it depends on your spending habits and redemption goals. If you have a large balance on a card that has recently seen devaluations or has announced upcoming negative changes, the case for 'earning and burning'—redeeming points as you go—is strong. This strategy protects you from sudden decreases in value. However, if you are saving for a specific high-value reward, like a business class flight or a luxury hotel stay, hoarding points is necessary. In this scenario, your goal should be to redeem them as soon as you hit your target. Letting a large balance sit idle for years is risky, as airline and hotel partners can be removed or transfer ratios can worsen overnight, as seen with some banks.
Smart Redemption Strategies for Maximum Value
Earning points is only half the battle; redeeming them wisely is where you create real value. As a general rule, travel redemptions often provide the highest value per point, especially when transferring points to airline or hotel loyalty programs. Redeeming points for merchandise from the bank’s catalogue, like electronics or home appliances, almost always offers the lowest value. Before you redeem, always compare your options. For instance, a flight ticket might give you a value of ₹0.50 per point, while a gift voucher might offer ₹0.30, and a statement credit could be as low as ₹0.20. Also, be on the lookout for promotional periods where banks offer bonus value for specific redemptions. A diversified approach is often best. Instead of relying on one card, it might make sense to have 2-3 cards and use each for the spending category where it earns the most rewards, which can help accelerate your earnings toward a meaningful redemption.
