Axis Bank devalues its co-branded credit card with Flipkart

Axis Bank has reduced benefits on its popular Flipkart Axis Bank Credit Card, which will come into effect from August 12. The reduced benefits mean that customers will have to spend more to redeem specific rewards.  

For example: Flight and hotel bookings done on Flipkart were earlier eligible for 5 per cent unlimited cashback. Now,  from August 12 , such bookings will earn unlimited 1.5% cashback. Other than this, all eligible spends on Flipkart will continue to earn 5 per cent unlimited cashback. Similarly, spends on Myntra were eligible for 5 per cent unlimited cashback. With effect from August 12, these spends will earn 1.5 per cent unlimited cashback.

"Flipkart Axis Bank credit cardholders will continue to earn 5 per cent unlimited cashback on eligible Flipkart spends and 1.5 per cent unlimited cashback on spends on Myntra. Further, customers can enjoy 4 per cent unlimited cashback on some of the most frequented merchants like Cleartrip, Swiggy, Tata Play, PVR, Cultfit & Uber . Cash back credit is a hassle-free, direct credit to the customer's statement. Further, the customer can view the transaction-wise cashback earned in the monthly statement," said Axis Bank spokesperson.

Moreover, with effect from August 12, annual fee will be waived off if spends exceed 3.5 lakh ( Rs 2 lakh existing limit) in the year.  "This increase in the threshold is only applicable for paid cards. The Life Time Free customers will continue to enjoy the benefits of the card, irrespective of the spends on the card," said Axis Bank spokesperson. 

What does it mean for credit card holders? “Axis Bank’s move to trim cashback and reward points on its co-branded credit card will bring down benefits for its customers. This devaluation of benefits that applies to some popular categories like travel, fuel, utilities, and more will directly affect customers who will have to increase spends to acquire more points for redeeming specific rewards,” said Pankaj Bansal, Chief Business Officer, BankBazaar.com

There were reports on social media that suggested that the devaluation would extend to the bank’s other credit cards, including the Axis Magnus card. This worried users, as they feared their accumulated points would go to waste. Axis Magnus is one of the most popular credit cards, as it offers 25,000 rewards points worth Rs 5,000 on monthly expenses exceeding Rs 1 lakh. 

The Axis Bank spokesperson said that terms and conditions of only Flipkart Axis Bank Credit Card have been changed so far. 

“Banks periodically reassess the rewards and benefits and rationalise them. With mounting interest rates, the cost of funds for the banks has gone up and as a result we are seeing tightening on credit card rewards and benefits. This has been going on for some months now and several banks have already downsized rewards points especially in the last one quarter,” said Bansal 

What should customers do? “Customers need to be more vigilant about how and how much they are using their credit cards and should follow best practices more than ever. Do not go overboard with your average spends just to reap higher benefits, instead optimise your credit card usage in the best possible way to hit reward milestones,” said Bansal.

Let’s take a look at the key feature changes announced for Axis Bank Flipkart Credit Card 

Change in the Cashback 

Expenditure on flight and hotels through Flipkart and on Myntra will now be eligible for 1.5 per cent unlimited cashback, down 5 per cent earlier.  

Exclusion of payments for cashback eligibility

The details shared on the website state that the following transactions will not be eligible for cashback now

• Payments made towards government services will not be eligible for cashback

• Cashback shall not be eligible on fuel spends, purchase of gift cards on Flipkart and Myntra, EMI transactions, purchases converted to EMI post-facto, wallet loading transactions, cash advances, rental payments, purchase of jewellery, insurance services, utilities, educational services, payment of outstanding balances, payment of card fees and other card charges

Annual Fee Waiver 

• Annual fee charged on the card will be waived on yearly spends over Rs 3.5 lakh. Earlier the limit was Rs 2 lakh

• Rent transactions and wallet load transactions will not be eligible for spends counted in availing annual fee waiver