The Great Devaluation
If you feel like your credit card isn't as rewarding as it used to be, you're not imagining things. Across India, major banks like HDFC Bank, SBI, ICICI Bank, and Axis Bank have been systematically trimming the benefits on their credit card offerings.
This trend, which picked up pace through 2025 and 2026, is what experts call a 'devaluation' or 'recalibration' of rewards. It’s a strategic shift by lenders who once used lavish perks to acquire customers but are now focusing more on profitability. The core reasons are simple: maintaining these reward programs is expensive, rising operational costs are squeezing bank margins, and a tougher regulatory environment is forcing a rethink of the old business model. As a result, the generous benefits that customers were accustomed to are being scaled back, making it harder to extract the same value as before.
Where the Cuts Hurt Most
The changes are not uniform but are noticeable across several popular categories. Airport lounge access, a signature perk of many premium cards, is one of the biggest casualties. Where free entry was once a given, many cards now require a minimum quarterly spend to unlock this benefit. For example, HDFC Bank's Regalia Gold now requires a spend of ₹60,000 in a quarter to enable lounge access. Cashback offers have also been hit with new caps. The popular SBI Cashback Card, for instance, capped its monthly cashback to ₹4,000. Reward point structures have become less generous, with banks increasing the number of points needed for redemptions or removing popular transfer partners like certain airlines and hotels without much notice. Milestone benefits have also been diluted. American Express, for example, significantly increased the spending required on its Platinum Travel card to earn bonus points and a Taj voucher. Even rent payments and utility bills, once a reliable way to accumulate points, are now often excluded from rewards programs.
Why Is This Happening Now?
This shift isn't arbitrary. It's a response to a combination of economic and regulatory pressures. For one, the cost for banks to provide these perks, from lounge access fees to funding cashback, has been rising steadily. At the same time, banks are facing increased credit card delinquencies, meaning more customers are defaulting on their payments, which increases losses for the issuers. There has also been a general softening in overall credit card spending growth. Furthermore, the Reserve Bank of India (RBI) has introduced tighter regulations aimed at consumer protection and responsible lending. This includes stricter rules on how banks operate and has indirectly encouraged them to make their rewards programs more sustainable. In this new environment, banks are shifting their strategy to reward high-spending, loyal customers while cutting costs on users who may have been drawn primarily by the freebies.
How to Adapt Your Card Strategy
The era of passively accumulating rewards is over. To get the most from your cards now, a more active approach is needed. First, conduct a wallet audit. Review the annual fees on all your cards and weigh them against the benefits you actually use, especially after the recent devaluations. If a premium card's perks have been slashed, it may no longer be worth the high fee. Second, read the fine print. Banks often communicate these changes through emails or app notifications that are easy to miss. Stay informed about new spending thresholds for lounge access or changes in reward point values. Finally, consider consolidating your spending onto one or two cards that best align with your lifestyle. If you travel frequently, a card that still offers strong travel benefits might be worth keeping, even if its dining rewards have been cut. For online shoppers, a card like the SBI Cashback or Amazon Pay ICICI card might still provide excellent value despite new caps. The key is to match your primary spending categories to the cards that still offer the best returns in those areas.
