Reward Devaluation 2025: Which Indian Banks Cut Benefits?

Bottom Line: Nearly every major Indian bank quietly nerfed credit card rewards between mid-2025 and early 2026. HDFC capped Infinia redemptions, AU Bank gutted Zenith earn rates, SBI added new exclusion categories, and Axis tightened lounge access. If you haven’t re-evaluated your wallet in the last six months, you’re probably leaving value on the table — or worse, paying for benefits that no longer exist.

The Great Indian Reward Haircut

Let’s not sugarcoat it: 2025 was the year Indian banks decided your credit card rewards were too generous. One by one — HDFC, SBI, ICICI, Axis, AU Small Finance Bank — they rolled out changes that reduced earn rates, capped redemptions, added exclusion categories, and quietly removed perks that made premium cards worth their annual fees.

This isn’t new. Banks have always tweaked reward structures. But the pace and scale of changes in 2025-26 has been unprecedented. And the worst part? Most of these changes were buried in PDF circulars and “revised terms” emails that nobody reads.

Here’s what actually happened, bank by bank.

HDFC Bank: Infinia Gets a Leash

HDFC’s Infinia has long been the gold standard for premium credit cards in India. But starting February 1, 2026, HDFC capped reward point redemptions to a maximum of five times per month. That’s a hard cap on how often you can convert points — not how many points you earn, but how frequently you can use them.

For power users who redeemed SmartBuy points across multiple bookings in a month, this is a real hit. You now need to plan redemptions more carefully, batching them instead of redeeming on the fly.

Other HDFC changes through 2025:

Lounge access across several cards now requires minimum quarterly spends to activate
Reward point earning on wallet loads (Paytm, Amazon Pay) was either reduced or excluded entirely on select cards
Fuel surcharge waivers were tightened with lower monthly caps on some mid-tier cards

AU Small Finance Bank: Zenith Takes the Biggest Hit

AU Bank’s Zenith credit card was a darling of the rewards community — genuinely high earn rates on a relatively accessible card. Then came the January 2026 devaluation.

The revised structure slashed earn rates significantly across most spending categories. Points earned before December 31, 2025 retained their old redemption value, but everything from January 1, 2026 onward follows the new, less generous structure.

If you were holding a large unredeemed Zenith balance and didn’t cash out before the cutoff, you’ve already felt the pain.

SBI Cards: Death by a Thousand Exclusions

SBI didn’t make one dramatic change — they made dozens of small ones. Throughout 2025, SBI Cards expanded the list of excluded merchant category codes (MCCs). Gaming platforms, wallet loads, insurance premium payments, and certain government transactions were progressively removed from reward-earning categories.

The net effect: your SBI card still “earns” the same rate on paper, but the number of transactions that actually qualify keeps shrinking.

ICICI Bank: Quiet Tightening

ICICI’s approach was subtler. Select cards saw revised milestone benefits — the spend thresholds for bonus rewards crept upward while the bonus amounts stayed flat or decreased. Lounge access on cards like the Sapphiro saw adjustments to the complimentary visit count based on quarterly spend requirements.

Axis Bank: Lounge and Reward Restructuring

Axis tightened the screws on lounge access across multiple card tiers and revised reward structures on several popular cards. The trend here mirrors the industry: more conditions, more caps, fewer freebies.

The Damage at a Glance

Bank	Card / Change	What Happened	Effective
HDFC	Infinia redemption cap	Max 5 redemptions/month	Feb 2026
HDFC	Wallet load exclusions	Reduced/no rewards on Paytm, Amazon Pay loads	Mid-2025
AU Bank	Zenith earn rate	Major cut to reward earn rates	Jan 2026
SBI	Multiple cards	Expanded MCC exclusions (gaming, wallets, insurance)	Through 2025
ICICI	Sapphiro & others	Higher milestone thresholds, lounge conditions	Late 2025
Axis	Multiple cards	Lounge access tied to spend, reward rate adjustments	2025-26

Why Banks Are Doing This

Three reasons:

RBI’s MDR pressure. Interchange revenue is under regulatory scrutiny. Banks are protecting margins by cutting the reward side of the equation.
Customer acquisition is done. India’s credit card base crossed 100 million. Banks no longer need to throw rewards at customers to get them in the door. Now it’s about profitability per card.
Abuse and arbitrage. Reward point communities figured out every loophole — wallet loads, gift card purchases, rental payments. Banks are closing those loops systematically.

What You Should Do Now

Audit your wallet. If you’re paying an annual fee, check whether the card still delivers enough value to justify it. Don’t pay Rs 10,000 for a card whose benefits just got halved.
Redeem points sooner. The trend is clear — point values only go down. Don’t hoard. Redeem for travel or statement credit while the value holds.
Diversify across banks. No single bank’s ecosystem is reliable anymore. A two-card or three-card setup across different banks hedges against any one bank’s devaluation.
Watch for lifetime-free alternatives. Cards like HSBC Cashback or select IDFC First offerings give decent baseline rewards with zero annual fee risk. If your premium card’s net value after fee is negative, downgrade.

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Frequently Asked Questions

Why are Indian banks cutting credit card rewards?

Tighter RBI regulations on interchange fees, the end of the customer acquisition land-grab (100M+ cards issued), and banks closing reward arbitrage loopholes are all driving the cuts. Banks are shifting from growth mode to profitability mode.

Did HDFC Infinia reduce reward earn rates?

Not the earn rate itself — HDFC capped Infinia reward redemptions to five per month starting February 2026. You still earn at the same rate, but you’re limited in how often you can convert points. This particularly affects frequent SmartBuy users.

Is the AU Zenith credit card still worth it after the devaluation?

It depends on your spend pattern and the annual fee you’re paying. The January 2026 earn rate cut was substantial. Run the numbers on your actual monthly spend against the new rates before renewing.

Should I redeem my credit card points now before further devaluation?

Generally, yes. The trend across Indian banks is toward lower point values over time. Unless you have a specific high-value redemption planned in the near future, redeeming sooner rather than later is the safer bet.

Which Indian credit cards haven’t been devalued recently?

Lifetime-free cards tend to be more stable since there’s no annual fee promise to justify. IDFC First Select, HSBC Cashback, and some co-branded cards have held relatively steady — though no card is immune. Check our comparison tool for current rates.

How often do Indian banks change credit card reward structures?

There’s no fixed schedule. Historically, major changes happened once a year. In 2025-26, some banks made multiple rounds of changes within months. Always check your bank’s latest terms circular — and follow CardTrail for real-time updates.