Rewards Restrictions: What does it mean for Axis Bank cardholders?

Axis Bank credit cardholders were surprised with the notifications received in the evening of March 19 regarding revision in their card benefits. The benefits have been revised for nearly all of the bank's credit card portfolio, which includes entry-level cards such as the Flipkart Axis Bank credit card, and high-end cards such as Magnus, Magnus Burgundy, Burgundy Private, and the Reserve credit card.

The Bank has chopped off benefits on travel credit cards as well, which includes the Atlas credit card, and co-branded credit cards such as Vistara Infinite and Vistara Platinum. The changes will be effective April 20, 2024.

Reduced travel spends

Some of the critical changes are revisions in the EDGE reward points redemption and transfer programme, and the capping of accelerated rewards on travel spends on the Atlas credit card. EDGE rewards from Axis Bank is a loyalty program that allows customers to earn points across all retail products.

Also, some of the popular services, such as meet-and-greet, concierge, airport transfers, etc., are going away on credit cards. A minimum spend of Rs 50,000 is required in the preceding quarter to avail of domestic lounge access. Essential spend categories like utilities, insurance, and government payments are excluded from card reward points. On the Reserve card, the annual bonus of 50,000 EDGE reward points has been discontinued, and more.

“It's difficult to trust Axis Bank right now in terms of their credit card rewards and features, as the bank is announcing changes to their credit cards portfolio, or blocking the redemption of rewards frequently,” says Tejas Ghongadi, Co-Founder, of The Points Code. The Points Code is a platform that helps credit card users get maximum benefits from credit card rewards and redemptions.

“None of the announced changes affects the core value proposition for the customer,” says Sanjeev Moghe, President and Head, Cards and Payments, Axis Bank. He adds that the bank keeps reviewing its features and benefits vis a vis the competition  on an ongoing basis. The bank also sees which features and benefits are popular with cardholders, and which aren’t. The bank also recalibrates cards which are utilised by very few people, but  the costs of which are disproportionately high for the bank.

Below is an overview of some of the major changes to Axis Bank credit cards.

Revision to the EDGE reward points transfer programme

All existing EDGE rewards / MILES transfer partners shall now be divided into two groups (A and B) effective April 20.

The number of EDGE rewards / MILES that a customer can transfer will be capped based on the group to which the partner belongs. That is, a customer can transfer only a certain amount of their EDGE rewards / MILES to partners in group A, and similarly, to the rest to partners in group B.

“The transfer of EDGE rewards / MILES to the groups varies for the credit cards,” says Ankur Mittal, Co-Founder and Chief Technology Officer, of Card Insider, a platform that tracks the credit card business. For instance, in the Reserve credit card, the overall capping per customer for EDGE rewards is 5 lakh points, and in group A and group B, the customer can transfer 1 lakh and 4 lakh EDGE reward points, respectively. Similarly, in the Magnus Burgundy credit card, the overall capping per customer for EDGE reward points is 10 lakh, while in group A and group B the customer can transfer 2 lakh and 8 lakh EDGE points, respectively (refer to the graphic).

“Group A and group B partners continue to offer good value to customers,” says Moghe. He adds, customers will be able to transfer the reward points at the same ratios as earlier.

Capping on accelerated EDGE miles on the Atlas credit card

Axis Bank has capped the accelerated EDGE Miles that can be earned on the Atlas credit card, which is popular in the travel segment. Cardholders will earn 5 EDGE Miles for every Rs 100 spent on Travel EDGE, airline, and hotel merchants, for transactions up to Rs 2 lakh per month. Thereafter, the cardholder will earn 2 EDGE Miles per Rs 100 spent on Travel EDGE, airline, and hotel merchants.

“We were seeing abnormal spending behaviour on some Atlas credit cards, so capping has been introduced,” says Moghe.

Further, the total EDGE MILES that can be converted to partner points in a calendar year is capped at 1.5 lakh EDGE MILES per customer. For the year 2024, customers can convert 1.5 lakh EDGE MILES from 20th April 2024 to 31st December 2024. From the next year onwards, the capping will apply from 1st January to 31st December 2025. The redemption through the Miles Transfer programme will be divided into two groups,  A and B (refer to the graphic).

Discontinued reward points on renewal of Axis Reserve credit card 

The Axis Reserve credit card has an annual / renewal fee of Rs 50,000, plus GST. The cardholder gets 50,000 reward points on card activation and renewal. Effective April 20, the annual benefit of 50,000 EDGE reward points will be discontinued.

On the Axis Reserve card,  annual fees are waived on spending Rs 35 lakh in the preceding year. “The card is for super affluent customers. We believe that the spend level is easily achievable for customers who take our Reserve card,” says Moghe. Since the customer will easily hit these spends, and their annual fee will be waived,  the bank has decided to do away with the 50,000 reward points on renewal.

Further, the spending threshold for the annual fee waiver will exclude spends on insurance, gold, and fuel. The current exclusions are government payments, wallet transfers, EMI payments, and utility bills. Further, the airport transfer service will also be discontinued for customers.

“Axis Bank just killed its topmost credit card,” says Sumanta Mandal, founder of TechnoFino, a platform that reviews debit and credit cards. He adds that on this card members are not earning reward points on essential categories like insurance, utility bills, and government payments. This card was known for its unique airport transfer benefit, but Axis Bank decided to remove that. “Instead of fixing loopholes, Axis Bank just removes benefits from the card,” Mandal adds.

However, Moghe says that the card has many features which continue to ensure that it remains a popular credit card.

Regarding the exclusion of spends on essential categories like utility bills,  etc., for computation of rewards on their high-end credit cards, Moghe says, “This is in line with industry norms; these are low interchange categories."