Why Are Indian Credit Card Issuers Devaluing Airport Concierge Benefits?
If you’re someone who frequently swipes your card for perks like airport lounge access, you might have noticed recent changes in your credit card’s benefits. Free airport lounges and concierge services were once seen as a given with premium cards in India. But now, these perks are being restructured or even removed. Why?
Let’s explore the reasons why major Indian banks are reshaping airport-related benefits—and what this trend means for cardholders like you.
1. Rising Costs are Hitting the Bottom Line
As inflation bites and operational expenses rise, offering lounge access has become a pricey affair for banks. Where once it cost about 0.10% of a card’s overall cost to offer these benefits, it now eats up nearly 0.25%. That’s a significant jump.
Banks are feeling the pressure to stay profitable, and cutting back on high-cost benefits like lounge access is one way to reduce expenses, especially for mid-tier cards that appeal to a broad range of users.
2. Declining “Revolver” Rates are Cutting into Profits
Credit card companies make a large part of their money from interest on balances carried over month-to-month (called “revolving” balances). But lately, fewer cardholders are carrying balances, especially as financial literacy improves and more people clear dues on time.
For example, SBI Card 's revolving rate dropped from 34% in FY21 to just 24% by FY24. With fewer people paying interest, banks are earning less, making it harder to justify costly perks like unlimited lounge access.
3. More Travelers, Higher Lounge Usage
Post-pandemic travel is booming, and more cardholders are using airport lounges. While this is great for travelers, it’s costly for banks. With more people accessing lounges, the cost of these perks has gone up, making it harder for banks to offer unlimited or unfiltered access.
As a result, they’ve started placing limits on lounge access—restricting the number of visits, linking eligibility to quarterly spending, or even removing access altogether.
4. The Shift Towards Reward Programs
To maintain a balance between value and profitability, banks are refocusing their strategies on rewards that don’t involve high overhead costs. Programs now emphasize flexible reward points, cashbacks, and targeted discounts that align with your spending habits. This shift allows banks to stay competitive while reducing the burden of offering high-cost perks like concierge services.
Major Devaluations: What’s Changed Recently?
Here’s a rundown of recent devaluations by some major Indian banks:
What Does This Mean for You?
If you value airport perks, these changes are certainly disappointing. But with banks shifting their focus, we can expect future rewards to better align with day-to-day spending, emphasizing cashback, points flexibility, and other cost-effective perks.
For travelers who rely on lounge access, it might be time to revisit the market and see which cards still offer the benefits you’re looking for—just keep an eye on any changing terms. Otherwise, the shift away from traditional perks could be a reminder that the way we spend is changing, and credit card offerings are simply following suit.
Final Thoughts
Devaluation of airport perks is part of a larger recalibration. Banks are adjusting to keep up with rising costs and changing spending habits. So, while concierge benefits may be dwindling, more tailored rewards are on the rise. By understanding these changes, we can make smarter choices and ensure we’re getting the most from our credit cards.
This article brings a transparent look into why our favorite card benefits are being cut back and offers practical insights for cardholders navigating the new landscape. Don’t forget to share your thoughts and experiences in the comments below—how has the devaluation affected your travel plans?