From SBI, HDFC to ICICI Bank: Why credit card issuers are tightening their reward policies

Core Insights - The credit card industry is experiencing a trend of "reward fatigue," with major banks like Amex, ICICI, SBI, and HDFC reducing or altering their reward structures to manage costs and defaults [2][19] - American Express (Amex) has announced significant changes to its Platinum Travel Credit Card, reducing the rewards points from 25,000 to 10,000 for an annual spend of Rs. 4 lakh and eliminating the Taj Experiences e-Gift Card [1][18] - Other banks have also made similar adjustments, such as ICICI Bank discontinuing complimentary movie tickets and reducing lounge access, while SBI has halved the number of complimentary airport lounge visits [2][9][11] Amex Changes - Effective 9 March, Amex's Platinum Travel card will shift to a more demanding milestone structure, requiring Rs. 7 lakh in annual spending to receive the Taj voucher [1][18] - Amex has a relatively small market presence in India with 1.34 million outstanding cards, yet it leads among foreign banks [5][18] - The changes have led to dissatisfaction among users, with some feeling that the rules have changed unexpectedly, akin to altering game rules mid-play [5][18] Industry Trends - The trend of devaluation is not isolated to Amex; other banks like Axis Bank and HDFC have also revised their reward structures, indicating a broader industry shift [2][19] - Axis Bank has transitioned to a transaction category system for rewards, while HDFC attempted to reduce reward multipliers but faced backlash and had to roll back the changes [8][14][15] - The overall message for consumers is that credit card perks are not stable and require strategic management to optimize benefits [3][16] User Experiences - Users like Vishal Rajpal and Kamal Narang have expressed frustration over the devaluation of rewards, leading some to deactivate their cards [4][7] - New spending requirements for benefits are forcing users to adjust their spending habits, as seen with Sriram Sarathy needing to increase his quarterly spending to maintain discounts [12][13] - The evolving landscape of credit card rewards emphasizes the need for consumers to choose cards based on their spending needs rather than potential rewards [17]