IDFC First Bank Reduces Credit Card Benefits: Implications For Cardholders

IDFC First Bank has recently announced reductions in benefits offered to its credit cardholders, joining a trend seen across the banking sector. The adjustments, communicated via emails to cardholders on 1 April, affect all IDFC First Bank credit cards except the super-premium IDFC First Private Credit Card.

This move follows similar actions by other major players in the industry, such as Axis Bank, ICICI Bank and Yes Bank, who have recently scaled back their card benefits.

Effective from 1 May 2024, the revisions include cuts to reward points for online spending, stricter criteria for airport lounge access and updates to terms for utility and rent payments made through the bank's cards.

Revised Reward Points System

Under the new system, the reward points earned on online spending up to Rs 20,000 in a statement cycle will be reduced to three times (3X), down from the current six times (6X). However, cardholders will still earn 10 times (10X) reward points on incremental spends above Rs 20,000 per month.

Introduction of Surcharge

IDFC First Bank will impose a surcharge of 1 per cent plus GST when the aggregate utility bill payments made with a credit card exceed Rs 20,000 in a statement cycle. No surcharge will be levied if utility bill transactions amount to Rs 20,000 or less.

Airport Lounge Access

The number of complimentary domestic airport lounge visits for IDFC First Select Credit Cards will be reduced from four each quarter to two starting 1 May. Similarly, First Wealth Credit Cardholders will now have access to both domestic and international airport lounges twice per quarter, down from the previous limit of four visits.

To qualify for complimentary lounge access, cardholders must now spend a minimum of Rs 20,000 in a calendar month, increased from Rs 5,000 per month previously.

Hiked Charges for Rental Transactions

IDFC First Bank has raised charges for rent transactions to Rs 249 per transaction or 1 percent plus 18 percent GST, whichever is higher, up from the previous rate.

Reduction in Buy-One-Get-One Offers

The value of the buy-one-get-one offer on Paytm movies has been reduced for both IDFC First Select and Wealth credit cards.

Revised Benefits on Co-Branded Fuel Credit Cards

The bank's co-branded fuel credit cards in association with Hindustan Petroleum (HPCL) will see changes in reward points and fuel charge waivers from 1 May.

Impact on Credit Card Holders

While IDFC First Bank offers some lifetime-free reward credit cards, including First Classic, Millennia, Select, Wealth, and Wow, the adjustments primarily affect Select and Wealth cardholders, who will now earn similar rewards as other cardholders.

Overall, these changes reflect a broader trend in the industry towards recalibrating credit card benefits, potentially impacting cardholder satisfaction and usage patterns.