Using Axis Atlas credit cards for ‘business’ spends lands cardholders in a soup

As per the bank’s policies, the credit cards can only be used for “…personal expenses and purposes, and any other transaction (including for business and commercial purposes) is prohibited under the Axis Bank’s card member agreement,” the email said.

The bank’s mail suggests that it noticed users spending money on expenses that are not personal in nature and hence, not usually allowed as it would amount to unfair reward accumulation.

“Axis Atlas is a travel focused credit card, so it's surprising that the bank is asking for invoices and clarification for travel category expenses over the past few months,” said Sumanta Mandal, founder of TechnoFino, a platform that reviews debit and credit cards.

“Evaluating usage of the features and benefits offered on various credit cards is a periodic and ongoing exercise. As part of this exercise, whenever the bank observes a pattern of transactions that is non-personal in nature, customers are requested to furnish evidence to establish the nature of such transactions,” an Axis Bank spokesperson told Moneycontrol.

Genuine credit card users affected

The exercise has resulted in users across the board, even those who swiped these cards specifically to fund personal travel expenses, landing in a soup.

“Axis Bank is trying to prevent misuse of credit cards by restricting reward points redemption, but some users who have genuine spends have also received the notices,” said Ankur Mittal, co-founder and chief technology officer, Card Insider, a platform that tracks credit card business.

Even such bona fide users will now have to go through the tedious process of producing bills to claim their rewards.

“Some people just spent under Rs 10,000 on travel categories have also received clarification notices,” Mandal said.

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Earlier blocking instances

Experts who track credit cards say that Axis Bank keeps a close vigil on suspicious spending patterns. In March 2023 it sent suspected commercial use notifications to the high networth individual (HNI) holders of cards such as Axis Magnus and Axis Reserve.

“The bank also has a history of cancelling cashback cards such as Axis Ace and Flipkart Axis Bank credit cards if they were found used for business purposes,” said Mandal.

Recourse for cardholders

Credit cardholders with genuine personal travel expenses and invoices to back these spends don’t have to worry. An email explaining the spends and soft copies of invoices would be sufficient.

The bank has sent a web link in the mail, allowing users to submit invoices, online. The proofs must be submitted within 30 days of getting the mail. You can also use phone banking to get in touch with the bank.

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Keep personal and business expenses separate

Experts say it is not a good idea to mix business and personal expenses on your personal credit card. Personal credit cards are meant for personal use and the benefits and rewards are optimised based on individual usage.

“Most issuers have separate business credit cards that are specifically optimised for businesses and have better rewards and benefits for business users,” said Adhil Shetty, CEO, BankBazaar.com.

Proper use of a business credit card helps build business credit and also offers a chance to earn additional rewards and benefits.

Many banks draw a strict line between personal and business use of a personal credit card and outline them in their terms and conditions. Even credit card issuers who may not have explicitly mentioned it in their terms and conditions may flag excessive use for business purposes.