Why Your Credit Card Perks Are Disappearing

Dear Reader,

Kartik got his first Amex credit card about four years ago.

"An Amex is a status symbol. My friend had one, so I got it too," the 27-year-old content manager from Chandigarh told me.

At first, he had no idea what he was doing. He was swiping the card and collecting points without thinking about them.

Then someone told him how the system worked.

Over the next couple years, he accumulated enough points to pay for a five-night stay at a Marriott hotel in Singapore. He even earned a Rs 10,000 Taj voucher.

“I had never been to the Taj before, that was a big deal for me,” he told me.  

Then this year, the rules changed.

American Express raised the spending needed for that same Taj voucher from Rs four lakh to Rs seven lakh. Axis reduced cashback on its popular Airtel co-branded card. SBI lowered the monthly cashback cap on its flagship Cashback card. 

"It certainly feels like a pinch," he said.

He isn't the only one. 

Spend five minutes on Reddit or X and you'll find many other people complaining that banks are moving the goalposts.

So why are they they doing so?

Raj Khosla of MyMoneyMantra told me that the current wave of devaluations picked up toward the end of 2024.

Post-Covid, banks were aggressively acquiring customers and were willing to subsidise generous rewards. But as more consumers learnt how to maximise points and avoid paying interest by clearing bills in full, those programmes became expensive to run.

Another source I spoke to said these kinds of devaluations are quite common and happen across mature credit card markets.

Still, that doesn't necessarily make them feel fair.

Kartik says it increasingly feels like the best rewards are now meant for people who already have a higher spending power.

"If someone is earning Rs 50 lakh a year, they have a lot of options. But if you're earning Rs 12 or 15 lakh, it's not the same."

So what's really going on? Why are banks announcing these devaluations? And what, if anything, can you still do?

Tune in to the latest episode of The Signal Brief to learn more. 

You can find The Signal Brief on YouTube, Spotify, and Apple Podcasts.

Thank you once again for listening and supporting us. We’d love to hear from you; write to us at [email protected] or find us on Instagram or X at @thesignaldotco.

Best,
Kudrat
on behalf of The Core

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