Credit Card Fees and Rules Change: Should You Be Worried?

Credit cards have bridged the gap to a large extent for individuals to fulfill their luxurious needs to some extent, thanks to the option of paying installments through EMIs. While a lot of Indians are also into eternal credit card debt owing to the same scheme, they have become a vital part of a salaried individual’s monthly expense. 

There are both benefits and shortcomings to credit card usage, and of late, it has been reported that banks are witnessing large payments taking place via credit cards for expenses like education fees, rent, and other utilities. This pattern of spending by users makes life hard for a bank to sustain generous rewards. 

As a result, various banks have decided to make changes to their credit card reward structure and also introduced new fees and even adjusted spending thresholds. Industry experts believe banks will introduce more changes to the credit card system in 2025. 

Also, banks have noticed some users are misusing their reward programs by figuring out loopholes. It’s reported that individuals are spending large amounts on certain categories or merchant partners to maximize rewards. 

Let’s take a look at which banks have made changes to their existing credit card system: 

1. Axis Bank introduced a new redemption fee for EDGE rewards and miles. The bank also revised interest rates, penalty charges, and transaction fees. Additional fees will apply to fuel transactions, rent payments, and wallet loads. 
2. HDFC bank, on the other hand, imposed a 1% fee on utility bills exceeding Rs.50,000 and a 1% fee on fuel transactions above Rs.15,000. 
3. SBI Card has discontinued its reward system for payments related to education, government payments, rent, and the Bharat Bill Payment System. There will also be a 1% fee on utility payments above Rs.50,000
4. YES Bank introduced a cap on its reward points for flight and hotel redemptions. The bank also announced a new spending threshold for complimentary lounge access. 

For frequent users of credit cards, these changes mean that they should revisit their spending strategies. Premium benefits like airport lounge access will now come with stricter eligibility criteria. An advisable strategy is to hold multiple credit cards and ensure access to reward systems across different categories. 

Not just the above-mentioned banks, more banks might come up with credit card regulations, but thanks to the RBI’s push for transparency, these banks will be required to notify customers of these changes. Credit card users are advised to stay informed, keep track of the changes, and make an informed decision on their spending strategy.