Axis Bank has made significant changes to its Vistara co-branded credit cards, primarily affecting milestone attainment through significant expenditures. The Axis Bank Vistara Credit Card will be subject to changes beginning January 3, 2024. Government services and utility transactions will no longer earn Club Vistara points or contribute to milestone benefits.

These changes exclude spending in these categories from the computation of milestone rewards, requiring cardholders to make qualified purchases within certain time limits in order to receive these benefits. Transactions falling under the categories of government services and utilities are identified using Merchant Category Codes (MCC) provided by networks such as Visa and MasterCard, which are not defined by Axis Bank. As a result, spending in certain prohibited categories will no longer count towards earning Club Vistara points in members' Club Vistara accounts, affecting the entire rewards system for Axis Bank Vistara Credit Card users. 

"Evaluating the use of features and benefits offered by different credit cards is a recurring or ongoing exercise." As part of this exercise, we have made changes to the Axis-Vistara credit card to exclude certain transaction types from earning rewards in order to discourage abnormal spending behaviour and drive business profitability," Sanjeev Moghe, President & Head - Cards and Payments, Axis Bank, told Business Standard. According to the company's press release:  The following changes will take effect on the co-branded Axis Bank Vistara Credit Card on January 3, 2024:

• Transactions involving government services will not be eligible for collecting Club Vistara points or reaching milestone benefits.

• Utility transactions will not be eligible for Club Vistara points or milestone rewards.

• Fines, tax payments, NPS payments, postal stamps, and other government services are examples of utility transactions, whereas telecom/phone, computer network services, cable television/pay TV or radio, electric, gas, sanitary, telephone, or water utilities are examples of government services. 

• Members receive Club Vistara (CV) points in their Club Vistara account for regular spending on Axis Bank Vistara Credit Cards. Spending on the banned categories will not count towards earning Club Vistara points.

Is it still worthwhile to apply for the Axis Vistara credit card? 

"Even with the exclusion of CV points on utility and government service purchases, Axis Vistara remains one of the best airline cards." The overall value of the card as a travel credit card remains unaffected. This modification, on the other hand, will have an impact on users' ability to meet spend thresholds for milestone benefits. Cardholders who typically have large utility expenditures each month may want to examine other cards that provide higher value-back on those transactions," said Rohit Chhibbar, Paisabazaar's Head of Credit Cards Business.

Axis Bank agreed to change the transfer percentage of edge reward points to its partners in August 2023. The card also lost its monthly milestone reward of 25,000 points and has a lesser 'points to miles conversion' as of September 1, 2023. Axis Magnus' annual fee has also been raised from Rs 10,000 + GST to Rs 12,500 + GST.

The most notable feature of the Axis Magnus Credit Card was its monthly milestone perks, which allowed customers to receive 25,000 bonus reward points after spending Rs. 1 lakh in a month. This benefit was phased out on September 1st.

In addition, on of September 1, the transfer ratio for Axis Magnus cardholders to convert reward points to airline and hotel loyalty programs reduced to 5:2, down from 5:4 previously. This implies that for 50,000 reward points, you now get 20,000 air miles instead of 40,000 miles previously. 

The monthly milestone benefit was the card's main selling feature, as high-spending customers might earn 3 lakh more reward points. Cardholders could save a significant amount on their travel expenses by converting their earned reward points to air miles in a 5:4 ratio. However, according to Paisabazaar data, if a user continues to spend Rs 1 lakh per month on domestic spending, they will only be able to earn up to 72,000 reward points on the standard earning rate.

Customers now must spend more to begin receiving reward points. "Credit card companies frequently change their reward programs to meet changing consumer demands, regulatory changes, and competitive market trends." Indian consumers are value-conscious and seek rewards that are more relevant to their lifestyle. This is causing credit card firms to abandon traditional bonuses in favor of redefining their rewards. Companies are also using data analytics to tailor rewards and connect them with consumers' spending habits. "These changes reflect the ongoing effort to remain responsive to consumers' changing needs and expectations," stated Adhil Shetty, CEO of Bankbazaar.com.