This is not precisely a devaluation, so I won’t be referring to it as one, but HDFC Bank has just rolled out a 30-day notice to changes to all sorts of HDFC Bank Credit Card products’ earn and burn as of January 1, 2023.

HDFC Bank introduces caps on Smartbuy Redemptions

HDFC Bank had, in 2020, introduced caps on the value of the travel bookings redemptions, whereby you could only use up to 70% of your points for a flight/hotel redemption value and had to pay the remaining 30% via the card necessarily. Now, new limits are being imposed on the redemptions. In 2019, many cards received a cap on monthly redemptions permitted. Per calendar month, you will be only able to apply up to 150,000 points towards redemptions. Here are the caps that will be set in January 2023:

• Infinia: 150,000 Reward Points to be used against one or multiple flights and hotel bookings on Infinia
• Diners Club Black: 75,000 Reward Points to be used against one or multiple flights and hotel bookings on DCB
• Other Cards (Regalia, etc.): 50,000 Reward Points for all other cards to be used against one or multiple flights and hotel bookings.

There are new caps on other redemptions as well. HDFC Bank introduced the option to redeem reward points for Infinia card members for Tanishq vouchers back in the day on a 1:1 basis. Now, they will introduce a cap, w.e.f. January 1, 2023, you can only redeem 50K points per calendar month for Tanishq vouchers. This affects Infinia cardmembers only. Other card members, such as DCB anyways, paid a higher redemption for Tanishq vouchers and won’t be affected. (For reference, DCB vouchers came at 2 RP: 1 INR Tanishq Voucher).

Other reward capping rules coming effective February 1, 2023

For other products and vouchers, the redemption of Reward Points will be capped at 70% of the total value for card members. For instance, if you want to redeem points for an INR 5,000 Tumi Gift Card, now you can only pay 70% of the value with points (INR 3,500), and the remaining INR 1,500 will have to be born with the credit card. You must use the same credit card which you are using to redeem the points. This change goes into effect on February 1, 2023. Fortunately, this cap is not for Infinia and Diners Club Black Cardmembers.

Also, the redemption of Reward Points against statement balance (CashBack redemption) will be capped per calendar month at 3,000 Reward Points for Millennia, Easy Emi millennia, Bharat, Pharmeasy and Paytm cards and 50,000 Reward Points for all other cards February 1, 2023, onwards.

Rent payments will not earn Reward Points.

From offering cash back on rent payments back in the day to not offering any points on rent payments at all, HDFC Bank has come a long way. So, effective January 1, 2023, you will not be rewarded points for that transaction if you pay rent via a third-party app/gateway such as RedGiraffe, Housing, NoBroker, Red, etc.

HDFC Bank is not the only one, and almost all banks are closing the noose on rent payments via credit cards (Axis did the same effective November 15, 2022. They did leave their super-premium cards out of this move, though). There are two kinds of people who would use the feature. One type needed the liquidity for some additional time to be able to pay their rent. The others were those who would do it for the points or meet minimum spend criteria. Almost all banks want to close the latter since it is a cost to them, and if no one else is giving points for Rent transactions, why should they?

Government-related transactions will not earn Reward Points on personal credit cards.

Government-related transactions, effective January 1, 2023, will not earn Reward Points on all the cards except Business Regalia, Business Regalia first, Business Money back, CSC small business money back, Paytm Business, Flipkart Business, Retailio, Best Price Save Smart, Best Price Save Max and Pinelab credit cards. These are the cards listed on the HDFC Bank Business Credit Cards website.

I know where this is coming from. I recently read a report which I cannot place right now. Still, the Merchant code 9399 for Government Services (not classified elsewhere) seems to be one of the highest transacting categories for e-commerce and Point of Sale swipes per at least one payment gateway in India. And if the spending with the government is that high, and perhaps the MDR too low, then it makes no sense to give reward points for this class of service.

And guess what is going to get affected? Those NPS contributions people have been making with their credit cards because that is classified as a Government service. Again, HDFC Bank follows Axis Bank here.

Education-related transactions will not earn Reward Points on Business Credit Cards.

Similarly, education-related transactions will not earn Reward Points on Business Regalia, Business Regalia first, Business Money back, CSC small business moneyback, Paytm Business, Flipkart Business, Retailio, Best Price Save Smart, Best Price Save Max and Pinelab credit cards effective January 1, 2023.

Grocery Rewards capped

If you shop for a lot of groceries, bad news for you. The reward points earned on grocery transactions will be capped per calendar month:

• 2000 Reward Points for Infinia, Diners Black, Regalia, Regalia Gold, Regalia first, Business Regalia, Business Regalia First, Diners Privilege, Diners Premium, Diners Clubmiles, Tata Neu Infinity cards
• 1000 Reward Points for the rest of the cards.

You can read the full announcement from HDFC Bank here.

Bottomline

Many changes are coming to HDFC Bank Reward points earned and burned in 2023. You can’t earn points on government spending using a personal card and educational spending using a business card anymore. Plus, there are tonnes of caps coming on redemptions for travel and Tanishq Vouchers as well. Ultimately, it is not a devaluation because there is a focus on fixing loopholes and focusing on the profitability of customers, and in the process, stamping out the abuse of the cards in the hands of a few.

What do you make of these changes being introduced by HDFC Bank for their credit card portfolio? 

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