Another Card by HDFC to join the Devaluation Club
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Diners Club Privilege Devaluation w.e.f. Aug 1
- Thread starter Walter White
- Start date
True that. Rush will be reduced at Airport. But devaluing premium cards is not good way as per opinion. Medium range cards are handle by freeloaders, so devaluation should happen there. Just my opinion.
I just did a quick google search and got this info - Banks pay about Rs 800 (US$10) for every domestic-lounge access to lounge providers such as Dreamfolks and around Rs 1,500 (US$18) for an international-lounge access. Earlier, in 2021, India's largest private lender HDFC Bank increased its free lounge access to 50 from 18 for the non-premium card holders.Rising credit card issuances and air travel led to 8.5 million footfalls across airport lounges last year.What was once an exclusive service became a top-selling feature for even the non-premium cards issued by bank.Banks did not anticipate this kind of usage and are now left saddled with higher cost.
Over the next year, a few banks are going to make bigger changes in the way they give lounge access, but will find it hard to tell their customers
There is a paywall article on it also https://the-ken.com/story/when-credit-cards-made-airport-lounges-too-much-of-a-good-thing/#:~:text=Banks pay about Rs 800,the non-premium card holders.
Yes the service which has exclusivity now has no exclusivity. Yes many changes will be expected. I personally experienced (Chennai, Mumbai, Delhi, Hyd) people waiting a lot and found normal waiting places are not overcrowded but lounges are.
In case anyone wants to read the article
With the increasing number of credit card users, many cards will cut down on Lounge benefits as it costs the bank a lot of money. We would see many such devaluations in the coming months as the credit card user base grows further. Banks have no incentive to provide bigger benefits if they are issuing new cards in good number anyhow.
Someone uploaded it on LinkedIn
With increasing credit card users and transactions banks are getting higher incentive than ever. They are getting more and more profit day by day. So they are supposed to give more benefits to the users, isn't it? I think less carpet area of Lounges and MONEY HUNGER nature of the banks are the main issues.
The benefits are given to increase the number of people getting the cards. Usual tendency has been to stay away from loan/ credit instruments. To overcome this, banks started giving rewards & benefits on credit cards.
Now, since, the number of people taking the cards is increasing, banks have lesser incentive to give benefits that cost them more money, like lounges. Hence, we are seeing these devaluations and will see more of them in future.
All banks are reporting higher profit each Quarters. I never heard in India profit of the bank decreasing due to credit card section. I still think banks are earning more money due to higher number of users in India. They want more profit that's the issue.
Yesterday there was a link on mint, that earlier lounge access was costing them 0.1% of revenue now it’s costing them 0.25% so there is 150% increase in the cost per visit also. To minimise the costs and other retention cost and decrease the crowd at the Lounges many factors are considered.All banks are reporting higher profit each Quarters. I never heard in India profit of the bank decreasing due to credit card section. I still think banks are earning more money due to higher number of users in India. They want more profit that's the issue.
Apart from that now users are having many cards which has lounge access without using cards. So cc companies are shifting towards spend based lounge access which will be win win for both.
How would they then justify the high annual fees? If you want to switch to a spend-based reward model then let more people into the credit card ecosystem with lower fees. You can't have the cake and eat it too, somewhere along the way they need to meet us halfway!
Coming to the high annual fees all the super premium cards, premium cards and mid range cards provide almost rewards, vouchers or points equivalent amount of the fees paid except the tax which is paid to government. As an user and person we need to understand nothing in the world is free of cost. If someone is giving it for free they’ve to earn it from somewhere else.
Coming to lounge access when lounge access was exclusive it had value, but now it has no value because of which lounges are being flocked. Even the agents sells more credit cards showing cards have lounge access. A small question have you experienced lounge access in the past and present?? Because 2-3 years back when I was travelling lounges were little vacant and free but now to get in it takes lot of time and food is also not available.
And all the banks mostly have reduced the number of lounge access not removed completely (except in case SBI cash back). See in the long run if banks need to sustain and provide us service they need to be profitable. It’s like earlier they used to serve cake 12 times a year now they serve 2 times a quarter, anyways we are getting a cake. It’s up to us to have it or not.
pprakash11
TF Prestige
May be HDFC won't give you LTF. #just HDFC things
sarainfo12
TF Premier
- 5X Reward Points on Swiggy and Zomato. Additional 4X RP is capped at 2500 reward points every calendar month
can some explain above point? is this means 9x RP ?
sarainfo12
TF Premier
currently i am buying swiggy vouchers from amazon which gives 8% cashback , that 20RP is better than this ?
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