Higher fees, lower reward points: Axis Bank cuts back on Magnus, Reserve credit card benefits

Axis Bank has hiked the annual fee waiver threshold for the Magnus card from Rs 15 lakh to Rs 25 lakh.

Bringing an end to all speculation over the past few weeks, Axis Bank introduced some significant changes for its Magnus and Reserve credit card customers on July 21. These changes, which are likely to disappoint credit card users, will take effect from September 1, 2023.

They are:

One: The bank has hiked the annual fee for its Magnus credit card and raised the spend threshold for the waiver of the annual fee for both Magnus and Reserve credit cards.

Two: Certain credit card spends (such as utility bill payments) will no longer earn reward points, known as EDGE reward points, and not count towards meeting the annual fee waiver threshold.

Three: The transfer ratio for converting reward points to hotel and airline points/miles has been made less attractive, dropping from the current 5:4 to 5:2. This means that you will only receive 2 partner points/miles instead of 4 in exchange for 5 reward points.

However, there's one catch: If you are an existing Burgundy customer (Axis Bank's wealth customer) or become one, you will continue to enjoy the existing miles conversion ratio of 5:4. As for Axis Reserve credit card holders, they will need to open a Burgundy Private account along with the Burgundy Private credit card to continue enjoying this benefit.

The bank has increased the annual fee for the Magnus credit card from the current Rs 10,000 to Rs 12,500 (plus GST). Additionally, the annual benefit voucher of Rs 10,000 has been withdrawn.

Most significantly, the bank has raised the annual fee waiver threshold for the Magnus card from Rs 15 lakh to Rs 25 lakh. This means that you will only be eligible for a fee waiver in the current year if your cumulative spends in the preceding one year exceed Rs 25 lakh.

As for the Axis Reserve credit card, customers will now get a fee waiver of Rs 50,000 only if they cross the spend threshold of Rs 35 lakh, instead of the previous threshold of Rs 25 lakh.

These changes will apply to both existing and new customers (on-boarded from September 1, 2023, onwards) from September 1, itself. However, some of these changes may have a delayed impact on existing customers.

For example, existing credit card customers may still be eligible for the lower annual fee waiver threshold for one last time. Suppose you were issued a credit card in March 2023, your annual renewal fee will come due in March 2024 (before September 1, 2024).

In that case, you will be eligible for a fee waiver if your spends exceed the Rs 15 lakh limit. It's only in March 2025 (a date after September 1, 2024) that the revised Rs 25 lakh spend threshold will apply for fee waiver eligibility.

For existing customers, the higher fee waiver threshold will apply only for renewals that happen after September 1, 2024.

For both the credit cards, spends on utility bills and government payments (such as taxes) will not earn reward points from September 1, 2023. Such spends will also not count towards meeting the annual fee waiver threshold.

Another important change for Axis Magnus and Reserve credit card users is the lowering of the transfer ratio, which is the rate at which reward points can be converted into domestic and international hotel points and airline miles. This has been revised from the current 5:4 to 5:2. Additionally, the bank is now imposing a maximum limit of 5 lakh reward points that can be converted to partner points/air miles in a year per customer ID. This is an overall limit across all credit cards linked to that customer ID.

Also, for each airline/hotel transfer partner, a customer can only link one partner programme loyalty ID for each partner at a given point in time. That is, you can link only one loyalty programme ID per hotel and per airline partner that is part of the bank’s network. This has been done to avoid misuse – where a credit card holder links more than one ID (belonging not just to him but to others too) to maximise the utilisation of the collected partner points.

As part of the welcome benefit voucher (worth Rs 12,500) choices, customers on-boarded from September 1, 2023 will no longer have the option of Tata CLiQ vouchers. Burgundy customers will, however, get a welcome voucher worth Rs 5,000.

Apart from this, the bank has discontinued the annual benefit of vouchers worth Rs 10,000.

The very popular milestone benefit of 25,000 reward points on monthly spends of Rs 1 lakh, too, has been withdrawn. But this benefit has been replaced with an accelerated rewards rate that will favour high spenders. From September 1, 2023, Magnus cardholders will earn 12 reward points for every Rs 200 spent for cumulative spends of up to Rs 1.5 lakh. And beyond this threshold, every Rs 200 spent will earn them 35 reward points.

Come September 1, 2023 Magnus and Reserve credit card users are set to lose some of their very attractive benefits. Though, if you are a very high spender, you may still manage to qualify for the annual fee waiver. Also, the now-introduced accelerated rewards rate may work in your favour.

However, unless you are willing to engage with Axis Bank for wealth management services too, your rewards to partner points/miles conversion rate will become far less attractive.