Why credit card users want to grab hold of Axis Magnus

Yadav was blissfully unaware that such a credit card exists. The plastic being referred to is Axis Magnus, which is all the rage right now in the world of credit cards. Axis Magnus rewards its users on all spends. This includes expenses like insurance and rent and all types of discretionary spends. One can even pay for groceries and the utility bills by using Amazon vouchers bought with this credit card. Yadav said he has been routing all his fixed monthly expenses to Axis Magnus in ever since he signed up for it about two months ago.

The Axis Magnus credit card from Axis Bank boasts of a high earning as well as redemption rate. It offers 12 EDGE Rewards (ER) on every ₹200 spent. The bank’s accelerated rewards programme can help one collect significant number of reward points in a short time. “They have a base earning rate of 6%, which is decent as per the industry standard. What makes Axis Magnus really stand out is the 5X-10X accelerated rewards it offers,” said Kashif Ansari, assistant professor, Jindal School of banking and finance, O P Jindal Global University.

For instance, you will earn 5X rewards on the 6% base reward rate if you were to book a flight through Axis Travel Edge portal. This means you get rewards five times more than what you would have earned by booking the same flight through the airline’s website using Axis Magnus card (see graphic). Axis offers similar accelerated rewards on vouchers and gift cards of e-commerce websites (amazon, Flipkart, Big Basket, Myntra etc) and retail stores (Croma, Ajio and gift vouchers (see grfx) on Grab Deals and Gift Edge portals.

“Grab Deals is an affiliate platform for shopping and Gift Edge is for purchasing gift vouchers,” said Ankush Setia, co-founder, Multiply.

As for redemption rate, you can snag at least 4.8% on hotels and flights, which is quite high going by what other comparable cards offer. But if you convert rewards into Amazon/flipkart vouchers, the value is only 20 paise per point, which works out into a redemption rate of only 1.2% (see graphic). “It is safe to call Magnus a travel card as it offers the best deals on flights and hotels,” said Ansari.

The most attractive feature for Axis Magnus owners is the 25,000 milestone ER that is paid out when one spends ₹1 lakh in a month. This was introduced last year. As per Axis’ redemption value, 25,000 ER is equal to ₹5,000 in cash, but when used for certain flights or hotels, the value can even be ₹10,000-20,000.

Currently, Axis Bank has the highest number of partnerships with airlines and hotels, which gives the cardholder ample options to choose from for utilizing their reward points. Axis offers the highest conversion rate wherein 5 ER equals 4 airmiles/hotel points.

Other benefits include up to 40% discount on dining out, ₹500 discount on buying a second movie ticket, unlimited lounge access in international and select domestic airports with up to 8 free entries for friends and families in international airports and 8 free meet and greet service at airports.

Too good to be true?

When a bank offers exceptional benefits on a credit product, one is compelled to think if there’s a catch. Industry experts say there really isn’t one, at least in this case.

“I believe the bank’s strategy of offering high rewards is to bring people into the Axis fold as it is a late entrant to the premium credit card space,” said Ajay Awtaney, founder, LiveFromALounge.com (LFAL). “Axis offers rewards on almost all spends. Moreover, by offering a monthly 25,000 milestone ER on a certain amount, the bank has gamified the reward system in a way that it wants the users to not just own the card but use it as well. Axis Bank wants Magnus to be the default card that people use for all their requirements.”

However, the reward system is structured in a way that makes Axis Magnus a card for high spenders. This can also be seen in the bank’s eligibility criteria which issues Magnus to those with a minimum annual income of ₹18 lakh. To get it on a card-to-card basis, the customer should own a card with ₹5 lakh credit limit. This card also requires an annual fee of ₹11,800 (including GST), which is only waived off when one spends over ₹15 lakh annually. Do note that this ₹15 lakh limit excludes big expenses like rent and EMIs, or equated monthly instalments, and also doesn’t count wallet transactions.

High reward cards also generally have a limited life cycle as these are expensive propositions for banks. “When a bank takes such a punt, they change the benefits very fast. In the case of Axis Magnus, some lounge tie-ups have been discontinued and recently the bank reduced the maximum rewards on vouchers bought through Grab Deals,” said Kaamil Nakhasi, a banking professional with experience in the credit card department. “All premium credit cards have a life cycle wherein after an initial few years, banks start devaluating the benefits. HDFC Diners card is a case in point.”

Does this mean lofty rewards on axis Magnus are short-lived? Not yet, say experts. “Until last year or so, Axis was focused on making its cards known. Now, it is weeding out bad actors and fixing leaking buckets with profitability in mind. Even then, I don’t think the benefits would go away over the next two years at least,” said Awtaney.

Updated: 06 Jul 2023, 01:07 AM IST