Credit Card Fees and Rewards Are Changing: What You Need to Know in 2025

Credit card holders in India are facing a wave of changes as banks revise their fee structures, reward programmes, and spending conditions. Leading banks such as Axis Bank, HDFC Bank, SBI Card, and YES Bank have introduced new fees, adjusted spending thresholds, and restricted reward points across various categories.

With further modifications expected in 2025, it is crucial to understand how these changes may impact users and what steps can be taken to adapt.

Recent Changes in Credit Card Fees and Rewards

Several banks have recently updated their credit card terms, altering how customers earn and redeem rewards. Below is an overview of key revisions:

Axis Bank

• Introduced a new redemption fee for EDGE Rewards and Miles.
• Revised interest rates, penalty charges, and transaction fees.
• Additional fees are imposed on wallet loads, fuel transactions, and rent payments.

HDFC Bank

• Imposed a 1% fee on utility bills exceeding ₹50,000 and fuel transactions above ₹15,000.
• Introduced a reward redemption fee for statement credits.
• Increased annual fees for 6E Rewards cards.

SBI Card

• Discontinued reward points for transactions related to education, government payments, rent, and Bharat Bill Payment System (BBPS).
• Introduced a 1% fee on utility payments above ₹50,000.

YES Bank

• Capped reward points on flight and hotel redemptions.
• Introduced new spending thresholds for complimentary lounge access.

Bank of Baroda

• Increased interest rates for unpaid dues.

These changes indicate a shift in how banks manage their credit card benefits and associated costs.

Why Banks Are Revising Rewards and Increasing Fees

The increasing use of credit cards for high-value transactions such as rent, education fees, and utility payments has made it challenging for banks to sustain generous rewards.

Credit card rewards were initially designed to incentivise purchases across a broad range of categories. However, with users increasingly leveraging specific spending patterns to maximise benefits, banks have found it necessary to revise their programmes.

Additionally, reward point programmes are being tightened to prevent misuse. Some users have been exploiting loopholes by concentrating high-value transactions in specific categories or through select merchant partners. To counteract this, banks are modifying their offerings to maintain balance and ensure long-term sustainability.

Impact on Frequent Credit Card Users

For individuals who regularly use credit cards for travel, dining, or cashback benefits, these modifications may necessitate a reassessment of their spending strategies.

• Travel Benefits: Restrictions on lounge access and changes in flight and hotel reward redemptions could impact frequent flyers.
• Cashback and Rewards: Reduced reward earnings on specific categories may alter the overall value proposition of many credit cards.
• Spending Patterns: Increased fees on utility and rent payments could make these transactions less attractive on credit cards.

It is essential for users to stay informed about their respective credit card policies to avoid unexpected charges.

What’s Next for Credit Card Users?

As regulatory changes continue to influence the financial sector, banks are expected to further modify their credit card fee structures.

• Regulatory Oversight: The Reserve Bank of India (RBI) is increasingly pushing for greater transparency in credit card policies. Banks are now required to notify customers of any fee revisions via email.
• Impact of Expiring Bank-Network Contracts: The conclusion of exclusive agreements between banks and payment networks may lead to further modifications. Banks may reduce benefits on Visa and Mastercard credit cards, while some could enhance rewards on RuPay cards to attract customers.
• Ongoing Fee Adjustments: Banks will likely continue to evaluate the profitability of their credit card offerings, leading to potential further adjustments in annual fees, reward structures, and spending thresholds.

For now, credit card holders should stay updated on policy changes, track how new fees impact their spending, and assess their options accordingly to manage costs effectively.

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