Credit cards have become one of the most popular financial tools in India.
People use them not just for borrowing money, but also for rewards, cashback, travel benefits, discounts, and online shopping offers.
For years, banks and NBFCs aggressively promoted credit cards through pre-approved offers, cashback deals, reward points, and premium benefits.
This strategy helped the industry grow rapidly across the country.
But now, many card users are noticing a major change.
Several banks have started reducing rewards and tightening benefits on popular credit cards.
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Credit Card Rewards Are Slowly Shrinking
In recent months, many banks have cut cashback offers, reduced reward benefits, and added stricter conditions for premium services.
One major change has been seen in airport lounge access.
Earlier, many credit cards offered free lounge access without any conditions.
Now, banks are asking users to meet minimum spending limits before they can use these benefits.
Several popular cards have also changed their reward systems.
For example:
Airtel Axis Bank card now requires users to spend at least Rs 12,500 on eligible transactions to get cashback benefits.
HDFC Bank has increased the annual fee of its Infinia card to Rs 12,500 and added stricter spending conditions to continue using the card.
American Express India has raised the income eligibility for its Platinum Travel card from Rs 4 lakh to Rs 7 lakh.
SBI Card has reduced the cashback limit on its SBI Cashback Card from Rs 5,000 per month to Rs 2,000.
These changes have disappointed many users who earlier enjoyed generous rewards and easy benefits.
Why Are Banks Reducing Credit Card Benefits?
Experts say there are several reasons behind this trend.
One major reason is the rising cost of services like airport lounges.
Earlier, companies like DreamFolks managed lounge access for banks, but after changes in the market, banks now have to make direct partnerships with airport lounges, which has become more expensive.
Another important reason is the increase in credit card defaults and unsecured loans.
The Reserve Bank of India (RBI) had earlier asked banks to keep extra capital for credit card and unsecured lending risks.
Because of this, banks are becoming more careful and trying to reduce costs by cutting rewards and cashback offers.
Banks Now Focusing on Premium Customers
The credit card industry in India is still growing, but growth has slowed compared to previous years.
According to reports, credit card growth has dropped from around 21% in 2023 to nearly 8% now.
Because of this slowdown, banks are shifting their focus towards high-income and high-spending customers instead of small-value users.
Many banks now prefer customers who spend more regularly, maintain higher balances, and are less likely to default on payments.
For example, SBI Card reportedly added over 9 lakh high-value customers in just one quarter.
India’s Credit Card Market Still Growing Fast
Despite the recent changes, India’s credit card market continues to grow rapidly.
According to a report by IMARC, the Indian credit card market reached around $20.1 billion in 2025 and could grow to $39.5 billion by 2034.
However, for regular users, the era of easy rewards and generous cashback offers may slowly be coming to an end as banks focus more on profits and premium customers.