Banks Slash Credit Card Perks as Economics Take Over

Kartik, a 27-year-old content manager in Chandigarh, has been using credit cards for four years. He has a mix of seven cards, with three being his most regular choices: American Express, Amazon ICICI, and Axis Horizon.

This year, Kartik heard some troubling news - all three of these cards announced devaluations. For instance, American Express raised the spending threshold required to unlock its special Taj voucher from Rs 4 lakhs to Rs 7 lakhs.

Kartik's situation is not unique; many others have been affected by this change in policy. The host, Kudrat Wadhwa, notes that Kartik's anger towards these devaluations is shared by many others who are now facing difficulties in redeeming their points and rewards.

According to Raj Khosla, the CEO of MyMoneyMantra, a financial services marketplace, banks were willing to subsidize generous rewards during the post-COVID years when credit card spending was booming. However, as portfolios matured, banks realized that the economics weren't adding up, and they began cutting back on these benefits.