ICICI Bank reduces benefits on 21 credit cards, imposes minimum card usage for airport lounge access

Effective from April 1, ICICI Bank credit cardholders will get one complimentary airport lounge access by spending Rs 35,000 in the preceding calendar quarter.

ICICI Bank cardholders will soon see several changes in their credit card features and charges. These changes are introduced on selected 21 credit cards from ICICI Bank (see graphic).

This follows similar changes that credit cardholders at HDFC Bank, IDFC First Bank, SBI Card and a few others saw in 2023, especially when it came to curtailing airport lounge access within India. They had introduced minimum spending criteria on some of the credit cards to be eligible for airport lounge access.

Spending criteria on airport lounge access

Effective from April 1, ICICI Bank credit cardholders will get one complimentary airport lounge access by spending Rs 35,000 in the preceding calendar quarter. It means that spending made in the preceding calendar quarter will unlock access for the subsequent calendar quarter. For instance, to be eligible for complimentary lounge access in the April-June 2024 quarter, you need to spend a minimum of Rs 35,000 in the January-March 2024 quarter and similarly for the following quarters. At present, if you are using an ICICI Bank Coral Credit Card or ICICI Bank Expressions Credit Card you need a minimum spend of Rs 5,000 or above in a quarter to be eligible for complimentary lounge access.

This updated spending criterion to avail complimentary domestic airport lounge access will be applicable for below mentioned ICICI Bank credit cards:

“There are segments of cardholders who acquire lifetime free cards or mid-range cards and do not put any business on them, and then still use the airport lounge facilities offered by these cards,” said Ajay Awtaney, editor of LiveFromALounge.com, a popular website that provides information and analysis of credit cards and reward programs of hotels and airlines. So, for banks, these are loss-making customers.

Banks may not cancel the card for such customers just because they've not done business with them, but they reduce their costs (or benefits offered, if seen from the cardholder’s point of view), Awtaney added. So, the banks have changed product features to limit the number of lounge visits.

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Dynamic currency conversion fee

Effective from February 1, a dynamic currency conversion (DCC) fee of 1 percent plus taxes will be applicable on each international transaction carried out in Indian currency at an international location or transactions carried out in Indian currency with merchants located in India but registered in a foreign nation. These charges will apply to all ICICI Bank credit cards.

DCC is the currency conversion service on a real-time basis. It allows cardholders to make credit card payments in Indian currency at international locations or to merchants located in India but registered in a foreign nation. Although DCC simplifies the understanding of prices in Indian currency, it involves additional mark-ups/charges levied by merchants that may be unfavourable for you.

For instance, when you make a purchase at a store in an international country and use your ICICI Bank credit card to pay in INR on a POS machine, a DCC mark-up fee of 1 percent, along with applicable taxes, will be applied to the transaction amount. Similarly, if you make a purchase in India from a merchant registered overseas and use your ICICI Bank credit card to pay in INR, a DCC mark-up fee of 1 percent, plus taxes, will be charged on the transaction amount. Earlier, ICICI Bank was not levying DCC mark-up fees on credit cards.

No reward points on rent payments and e-wallet loading

Effective from February 1, ICICI Bank will refuse reward points on rent payments and e-wallet loading using credit cards. This change will apply to all ICICI bank credit cards, except for Amazon Pay ICICI Bank credit cards.

“These days a common method of cashing out credit card limits is by paying fake rent to family members or friends through online platforms that enable such transactions without a formal rent agreement,” said Sumanta Mandal, founder, TechnoFino, a firm that tracks credit card trends. So, leading banks not only exclude rent from their reward-earning lists but also impose a surcharge on such payments, he added.

“While credit card devaluation (the reduction of benefits associated with a credit card over time) is an integral part of a credit card's lifecycle, such malpractices only accelerate the process,” Mandal said. Due to misuse by certain professional groups, genuine credit card users bear the brunt.

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

Rewards on utility payments to continue

You will continue to earn reward points on utility transactions on all ICICI Bank credit cards as offered. Effective from February 1, government transactions such as income tax payment, stamp duty, documents registration, property taxes, etc. will be included under utility payment transactions. This change will apply to all ICICI Bank credit cards.