The Real Culprit Behind the Recent Devaluation of Travel-Focused Credit Cards

[Pankhuri]

I guess it's not completely mis-users fault. Banks can always set healthy limits instead of removing them from rewards like for utilities, 10-15k electricity bill per month is good enough for most of us, but Banks removed Utilities all together from rewards, which is unfair

Problem with such limits is some electricity boards are not consistent in billing. Mine sometimes does 1 month, sometimes 2. When 2 It crosses the 25K limit on amazon.

 

[WandereR]

Many business owners use their personal credit cards to cover office expenses such as electricity bills, rent, and various other business costs.

I remember somebody tried to argue with the entire forum to justify this 🤣
All these reasons still do not justify banks devaluing cards overnight. As pointed in another reply, proper limits should be set for non shopping/recurring spending categories instead of removing them entirely. Also, they were very late to block CC to bank transactions for monthly milestones (Magnus)

 

[rohitnsync]

True, I promoted Yaper one year ago, and I still believe that if people use it within limits, it may not become a significant issue. However, that's not the case. Also, if you've noticed, I haven't promoted a single brand in my YouTube videos since January 2023.

Agreed on all points 👍🏻

 

[D₹V]

Now, we are doing the job of the bank on how to stop misuse of credit cards. LOL

Spiting Facts 😭!

 

[Tirajat]

the collateral damage is inevitable. My Air Canada account got deactivated 2 weeks after I created without doing even a single transaction! Managed to connect to CC after 2 hours of hold and was told to send a copy of ID. Been over a month that I mailed and no action stilll.

 

[Salvo08]

Great that you highlighted the misuse of credit cards in this forum and onus lies on us to stop such unethical transactions. And I think we shouldn’t even promote apps like Yaper even for ‘with in limits’. Banks should strictly deal with defaulters.

 

[Vijay Rahul]

The 80/20 rule is ubiquitous; 80% of users follow it correctly, while 20% misuse it. For payments, utility banks can determine the average spending limit for those 80% of users and adjust pricing accordingly. The limit may vary based on different types of cards; for example, the AXIS Airtel card with a ₹300 cashback might be suitable for low-spending users, while the AXIS Magnus card could offer rewards of up to ₹1000 or a similar amount.

 

[NikTravelEnthusiast]

Same things is happenning with Income tax. While a majority of salaried class has been payig the taxes correctly, businesses are exploiting the tax system since years. Political system is also corroded.
What it comes in a bag of a common man is a peanuts.

So while this malpractices are not justified, but very difficult to control. So what banks are focussing on stringent practices. May be till then we all will suffer.

 

[AsB]

I have literally seen mobile shop owners in my hometown who sell costly branded smartphones (like Samsung S23 Ultra, or Fold 5) at very good price, sometimes going down even from Online prices. From my analysis, they use their Credit Card to buy the product with all discounts. Then they claim GST amount by showing their GST number (a few shopowners collectively create on GST number for multiple shops and use it). This is straightway wrong

 

[simplewarrior]

I have literally seen mobile shop owners in my hometown who sell costly branded smartphones (like Samsung S23 Ultra, or Fold 5) at very good price, sometimes going down even from Online prices. From my analysis, they use their Credit Card to buy the product with all discounts. Then they claim GST amount by showing their GST number (a few shopowners collectively create on GST number for multiple shops and use it). This is straightway wrong

Claiming GST is not a discount, they will ultimately have to pay the GST back to government when they resell the phone. What going on in the market is these shopkeepers are giving commission to general people to book phone for them during ecom sales. Hence they get around 5%-10% discount on phone purchases.

 

[Abhishek012]

The real reason behind banks excluding utility bills on credit card reward points is that mostly all credit card to bank transfer websites/apps like Snapay, Bharatnxt etc use the utility merchant category.

I shared this trick to almost everyone to get 5% cashback on Amazon gift card purchase using SBI Cashback credit card (monthly buy 1 lakh Amazon gv to get Rs5000 cashback) and use for Utility payment and Insurance payment from Amazon. Many users purchase 60k to 1 lakh monthly Amazon gv from SBI Cashback credit card but card is still not devalue because actual Utility bill pay and Insuranse bill pay user base is very low.

(Working Again) Trick to get 5% cashback on Amazon gift card using SBI Cashback credit card

Found a trick to get 5% cashback on Amazon gift card purchase using SBI Cashback credit card: Note - This is Amazon gift card purchase. You can use for Recharge, utility billpay, insurance, LIC, Amazon 3rd party merchant payment like Cleartrip, makemytrip, swiggy, MPL etc. There is also no...

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[ssnthegenius]

As we near the end of 2023, it's time to look back at the eventful year in the Indian credit card industry. We've witnessed significant shifts, such as Axis Magnus and Axis Reserve cards transforming from nearly useless to incredibly rewarding and then back to being relatively less rewarding. However, it's not all been positive, as several banks have imposed restrictions on various important categories, including utility bills, rent, government fees, and groceries, affecting their eligibility for earning rewards. What's behind these devaluations? Let's focus on travel-focused credit cards and explore why banks are making these changes.

When we apply for a credit card, we all agree to the Most Important Terms and Conditions (MITC) associated with that card. Unfortunately, many of us tend to overlook the fine print within these MITCs. One common stipulation found in the MITCs of all banks is that "personal credit cards should only be used for personal expenses."

This is where the notorious concept of "manufactured spending" (MS) comes into play. One common form of manufactured spending is purchasing items for someone else, who then reimburses you. For example, if you buy something for a friend using your credit card and they pay you back, it's considered a manufactured spend. So far, it may seem harmless, right? But what if I told you that there are websites and apps that encourage you to buy items for people living in different parts of the country, acting as intermediaries? Would you still think it's acceptable?
I won't mention any specific names, but some individuals have turned this method into a full-scale business, which directly goes against the bank's MITCs. Ankush Dixit, the Founder of Yaper, an app that serves as an intermediary for credit card users to buy products for others, shared on his LinkedIn profile that Yaper facilitated orders worth Rs. 12 crores on the first day of Flipkart's Big Billion Days Sale in 2022.
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This practice is a primary reason for recent credit card devaluations. Due to the existence of such websites and apps, banks have begun withholding regular reward points when customers take advantage of sales discounts.

While you may be familiar with these practices, there are other groups or businesses that are exploiting personal credit cards. Nowadays, travel agents are using personal travel-focused credit cards to amass reward points and air miles. Let me illustrate this with a real-life example:

Take Ramesh, a travel agent based in Gujarat (using a pseudonym to protect his identity), for instance. He used his Axis Magnus credit card to book flight tickets via the Axis Travel Edge portal, earning 5X EDGE Points. Due to the high volume of transactions, he accumulated substantial air miles and hotel loyalty points within a short period. And that's not all; he sold his air miles and hotel points for a significant amount. As a result of such rampant misuse, Axis Bank and many other banks were forced to devalue their credit cards and, in some cases, reduce the value of reward points.

We've all noticed that Axis Bank has imposed certain restrictions on how frequently you can link or change frequent flyer or hotel loyalty programs within a specific timeframe. But do you know the actual reason behind this?
The reason is that people were selling their Axis EDGE reward points, and this goes against the terms and conditions set by the bank. Let me illustrate this with an example:
Imagine Suresh wants to purchase 50,000 ITC Green Points from Ramesh in exchange for cash. Ramesh simply needs to enter Suresh's ITC Account ID while transferring his EDGE Points to ITC Green Points through the TravelEDGE portal, and the points get credited to Suresh's ITC account.
Nowadays, people transfer their credit card reward points to their own Frequent Flyer Program (FFP) accounts and later sell the entire account by sharing login credentials. You can find numerous groups on Telegram engaged in such activities.

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Notably, travel agents and Airmiles Brokers are transferring large quantities of points daily, not just from Axis Bank but also from numerous other credit card issuers. Because of these practices, we've witnessed the termination of many Frequent Flyer Program and hotel loyalty program accounts.
Travel agents and airmiles brokers are a major reason for the recent devaluation of credit cards.
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But have you ever wondered how a few people manage to accumulate such massive quantities of air miles using their credit cards? Let me tell you about a few professionals and their practices.

Chartered Accountants (CAs) utilize their credit cards to pay taxes for their clients, even though there are only a handful of credit cards that offer reward points for government payments.
Many insurance agents use their personal credit cards to pay their clients' insurance premiums.
In many areas, cyber cafes use their credit cards to pay people's utility bills, and you can imagine how many rewards they can amass through this method.
Many business owners use their personal credit cards to cover office expenses such as electricity bills, rent, and various other business costs. There are a few apps available that can be used by business owners to pay their vendors, employees' salaries and GST via credit cards for a nominal fee.
I don't think banks can entirely prevent such practices, but they can certainly monitor their customers' usage and, after a certain limit, ask for clarification and take necessary action against customers who misuse their credit cards. A normal credit card user typically does not pay insurance premiums exceeding 30% to 40% of their declared annual income. Similarly, a regular household utility bill should not exceed Rs. 20,000 (normally). Banks can easily monitor these aspects if they wish to do so.

In conclusion, while credit card devaluation is a normal part of the industry, these practices by travel agents, and other brokers are accelerating the devaluation process. Instead of devaluing credit cards for everyone, banks should focus on preventing these practices.

Ye kya he fir 😂😂

 

[Abhishek012]

Ye kya he fir 😂😂

 

[Deleted member 11974]

Ye kya he fir 😂😂

haathi ke 2 daath khane ke 2 dikhane ke

 

[CyberPsych]

TLDR anyone (in English)? New to credit cards and basic cards holder.

 

[TechnoFinoTechnoFino is verified member.]

Ye kya he fir 😂😂

as I said earlier... I've promoted Yaper one year ago, and I still believe that if people use it within limits, it may not become a significant issue. However, that's not the case. Also, if you've noticed, I haven't promoted a single brand in my YouTube videos since January 2023.

 

[Rohith-2009]

TLDR anyone (in English)? New to credit cards and basic cards holder.

I personally asked the founder to add subtitles for his videos. But he didn't respond which means he doesn't care about it

 

[typhoon]

I will say one thing, who was misusing Reserve Card Replacement 50k points?

Its all because of that AXIS devalued their system.

 

[typhoon]

Claiming GST is not a discount, they will ultimately have to pay the GST back to government when they resell the phone. What going on in the market is these shopkeepers are giving commission to general people to book phone for them during ecom sales. Hence they get around 5%-10% discount on phone purchases.

Trading happens everywhere, without trade there is no business, and its good that middle men are earning otherwise there are no govt. jobs even to employee them.

 

[Pack_of_Cards]

True, I promoted Yaper one year ago, and I still believe that if people use it within limits, it may not become a significant issue. However, that's not the case. Also, if you've noticed, I haven't promoted a single brand in my YouTube videos since January 2023.

That's escapism, sorry for being blunt and stratightforward.