Among the many changes, the bank discontinued its irresistible 25,000 reward points on ₹1 lakh monthly spend, increased its renewal fee by 25% to ₹12,500 (18% GST extra) and raised the annual fee waiver threshold to ₹25 lakh from the existing ₹15 lakh. That wasn’t all. The bank also reduced the 5:4 air miles and hotel points conversion rate to 5:2 for non-Burgundy (Axis bank’s premium banking service) members, who comprise a majority of the card owners. These changes are scheduled to come into effect from 1 September.
To become a Axis Burgundy member, one should maintain either a ₹10 lakh balance in the bank’s savings or current account or a total relationship value of ₹30 lakh (non-demat accounts). Salary account holders in Axis bank with a net monthly income of ₹3 lakh also qualify for the membership.
“The offerings were too good to be true, from the start. In fact, when the 25,000 milestone benefit was introduced, I expected it to last just a maximum of six months,” said Kashif Ansari, assistant professor, Jindal School of banking and finance, O P Jindal Global University. The exceptionally lucrative rewards on Magnus, which were the highest offered by any credit card in the world, lasted for about 11 months before Axis pulled the plug.
So, should high spenders now go back to co-branded cards for air miles and gift vouchers? Not yet. HDFC Infinia is a highly rewarding card in the super premium category. “It was the top card for many years before Magnus stole the limelight with its revamped offering. After the Magnus’ devaluations, Infinia is back at the top,” said Tejas Ghongadi, co-founder, The Points Code, a platform that advises credit card users on how to optimize reward points.
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High reward rate
Like Axis Magnus, HDFC Infinia generously rewards cardholders on almost all spends. This includes regular expenses on utilities, services and groceries, which one would anyway spend on. Users earn 5 Reward Points (RP) on every ₹150 spent. Accelerated rewards offered on transactions done via HDFC SmartBuy platform rake in 3-10X of the base reward points on certain purchases, such as shopping on Flipkart, flight bookings, Imagine Apple store, vouchers and hotel bookings.
“Smartbuy offers three things–hotel and flight bookings, shopping through affiliate links and vouchers,” said Ankush Setia, co-founder, Multiply.
As for redemption rate, HDFC Bank values 1 RP at 30 paise- ₹1 across different categories (see graphic). “The most attractive feature of HDFC Infinia is that you can book revenue flight tickets through reward points at 1:1 ratio. For someone who doesn’t like the hassle of transferring rewards, this is a sweet deal,” said Setia. Revenue ticket refers to a flight ticket booked via SmartBuy platform using HDFC Infinia reward points. Up to 70% of the total ticket value can be booked through rewards, while the remaining 30% is to be paid using the credit card. You will earn 5X rewards on this 30% payment made with the card. “Axis’s TravelEdge platform also offers revenue tickets but it’s useless as 1 Edge Reward (ER) is valued at just 20 paise,” said Setia.
Infinia’s redemption rates allow one to easily earn 15-20% on monthly spends (see graphic) if used strategically through its SmartBuy platform.
HDFC Infinia has a partnership with airlines also and the redemption rate for most airlines is one RP for every air mile earned, while it’s two RP for a single air mile for a select few. However, in comparison, Axis has more partner airlines and hotels and, hence, offers more options to users.
Buying instant vouchers of e-commerce, online shopping and food delivery platforms also gets more value on HDFC Infinia at 1.65%, compared to 1.2% on Magnus.
Hard to get
Unlike Axis Magnus, it isn’t easy to lay your hands on HDFC Infinia as it has stringent entry barriers. For one, it’s an invite-only card, which means you can’t apply for it and instead, the bank will shortlist you and offer it. Of course, if you have an existing relationship with HDFC bank, you can get an invite through your bank relationship manager. However, the bank checks whether you meet its criteria through two metrics–either your net monthly income should be over ₹3 lakh or you should have an HDFC card with credit limit of ₹10 lakh or more and you have cumulatively spent at least ₹8 lakh on it in the preceding six months.
It should be noted that qualifying either of these criteria doesn’t guarantee an Infinia card. “I know of people with ₹40-45 lakh annual incomes whose applications were rejected by the bank,” said Ghongadi. “In the case of Axis Magnus, low income customers also managed to get it through the card-on-card method. HDFC is very strict with issuing their premium cards,” he added.
Credit card experts believe it is for this reason that HDFC Infinia is in for the long haul despite being a high reward card. “Infinia, too, has gone through its share of devaluations, but not of the same degree as Magnus. Even when it was launched a decade back, the bank issued it to only 5,000 users and the bank continues to be selective about its Infinia customers,” said Setia.
Should you switch now?
Since changes on Axis Magnus will kick in from 1 September, the cards renewed before this date will get ₹ 15 lakh annual waiver limit. Ghongadi said he had recently renewed Magnus, so he will continue to use it for a year until the next renewal date. However, he intends to shift all his regular spends to Infinia for its better reward rate and will be selective in using Magnus. Most Magnus owners are likely to have the same plan.
Experts are advising against exhausting ₹1 lakh spends in August with Magnus to chase the 25,000 milestone benefits as these won’t be credited until October. The rewards may not reach you at all if another round of devaluation occurs. That is because the bank only has to give one month notice before revoking any benefit.
Ansari said people should look at optimizing the non-monetary benefits available on Magnus until the next renewal. “It offers airport meet-and-greet service and allows up to eight guest entries in international airport lounges, which Infinia doesn’t.”