The Great Credit Card Reward Rollback
India's largest banks — SBI Card, HDFC Bank, and ICICI Bank — have announced changes to their credit card reward programmes effective April 2026 that will reduce benefits for millions of cardholders. The moves come as monthly credit card spending growth decelerated to 8% YoY in February 2026, down from 22% in the same period last year, as high fuel prices squeeze discretionary spending.
What's Changing
HDFC Bank: Regalia and Millennia cards will see domestic airport lounge access capped at 2 visits/quarter (down from 4) unless monthly spending exceeds ₹40,000. The 5% cashback on grocery and utility payments is being reduced to 3%.
SBI Card: SimplyCLICK cards will no longer offer 10x rewards on Flipkart and Amazon; the multiplier drops to 5x. The annual fee waiver threshold for the Elite card rises from ₹3 lakh annual spend to ₹4 lakh.
ICICI Bank: Amazon Pay ICICI card reward rates on non-Amazon spends fall from 2% to 1.5%. Sapphiro and Emeralde cardholders will need to maintain a higher net banking relationship value to retain premium benefits.
Industry Context
Banks cite rising interchange costs, airline lounge congestion charges passed on by airport operators, and the overall economics of rewards programmes that were structured during a higher growth period. "The lounge access model was designed when utilisation was 15–20% of eligible cardholders. It's now 60%+ at major airports," said Nitin Chugh, CEO of SBI Card. "That model is unsustainable."
Consumer Impact
For frequent travellers who relied on credit card lounge benefits to access airports, the changes represent a meaningful reduction in travel perks. However, fintech analysts note that many consumers will simply shift spending to whichever card offers the best remaining reward rate — benefiting challenger cards from Axis Bank (Magnus, Reserve), RBL Bank, and AU Small Finance Bank that have not yet announced cuts.
