The internet has spent much discussion and energy on the product changes that were supposed to come out on the Axis Magnus credit card but never did. It was always known that Axis Bank Credit Cards would shake the tree to remove the bad actors. However, as you’d all guess, the fallout of that would be that everyone acting in good faith would also be drained into the swamp to borrow from Trump. Collateral Damage.

Axis Bank to roll out significant changes for Magnus Credit Card.

Axis Bank has just notified the customers of the Magnus Credit Cards about changes being rolled out for their very popular Magnus Credit Card. These changes are effective September 1, 2023. Let’s take a look:

• Higher Annual Fee: The first key change is the fee. For new customers who want to have the Magnus Credit Card and are onboarded on September 1 or after, the fee will be INR 12,500 plus GST. Old users continued to keep the INR 10,000 plus GST fee.
• Fee Waiver condition goes up:
  • New users who sign up for the card on or after September 1, 2023, will get a fee waiver for the next year if they spend INR 25 Lakhs on the card in the membership year.
  • Existing users who will have their card renewal after September 1, 2023, will get a fee waiver for their card if they spend INR 15 Lakhs on the card in the following membership year. However, for the renewal after September 1, 2024, they will also be subject to a renewal fee waiver only after INR 25 Lakh spend on the card in the membership year.
• Change of Welcome Benefit: For customers who are onboarded after September 1, 2023, the new welcome benefits will be vouchers worth INR 12,500 from one of the following brands:
  • Luxe Gift Card
  • The Postcard Hotels gift voucher
  • Yatra gift voucher
  • The Tata Cliq Gift Voucher will be discontinued after September 1, 2023
• Monthly Benefits of 25,000 EDGE Rewards on INR 1 Lakh spent to be discontinued: One of the significant pull factors for the card, and one that was encouraging a lot of unethical spending, was the card’s insane offer to award cardmembers 25,000 bonus points every month on the back of just INR 1 Lakh spend. This feature was launched in February 2022 and will disappear effective September 1, 2023. However, Axis Bank will be expediting the credit of points for prior months
  • 25K ER points for customers who achieved their monthly milestones in April 2023 should be on their way by July 31, 2023, per the ordinary course of business.
  •  25K ER points for customers who achieved their monthly milestones in May and June 2023 will be posted by July 31, 2023.
  •  25K ER points for customers who achieved their monthly milestones in July 2023 will be posted by August 10, 2023.
  • 25K ER points for customers who achieve their monthly milestone in August 2023 will receive their points within 90 days.
• New Rewards Earning Structure: Magnus will continue to offer 12 ER points for every 200 INR spent on the card, up to INR 1.5 Lakhs spent, effective September 1, 2023. Once your spending crosses this milestone, you get 35 ER points for your spending above INR 1.5 Lakhs on the card. This is intended to be the new gamification for the card.
• Government & Utility Spend is not going to be awarded points or counted for spend threshold: The card will stop awarding points and any sort of spend waivers on Government and Utility Spends:
  • Utilities: MCC Codes 4814, 4816, 4899, 4900 (Phone services, Computer Network/Information Services, Cable/Satellite and Other Pay Television and Radio Services, Utilities–Electric, Gas, Heating Oil, Sanitary, Water)
  • Government institutions: MCC Codes 9222, 9311, 9399, 9402(Fines, Tax Payments, Government Services Not classified elsewhere)
• TravelEDGE Earnings to be capped: One of the most generous features of the card was the offer to grant 5X EDGE Rewards on travel bookings using the AXIS Bank Travel EDGE portal, effectively granting 60 ER points for every 200 INR spent. Effective September 1, only the first INR 2 Lakh spent in the month on the TravelEDGE website will count for the 5X rewards. Beyond that, you get 35 ER points/INR 200 spent at TravelEDGE (2X bonus, roughly).
• Mileage Transfer Ratio to be changed: Effective September 1, 2023, EDGE Rewards transferred from Axis Magnus Credit Card or any credit card which has a Magnus relationship in the customer ID to an air miles or hotel points conversion partner will move from 5:4 to 5:2 conversion. All conversions through August 31, 2023, to the 19 partners will be honoured at the 5:4 ratio. If you open a Burgundy Relationship with the bank after September 1, 2023, you can continue with the 5:4 Ratio. More details are yet to be disclosed about this new spin.
• Mileage Transfer to be capped: Effective September 1, 2023, per customer ID (including all sorts of EDGE Rewards points), only conversion of 5 Lakh points per annum will be allowed in a calendar year. For the year 2023, this limit is going to be between the period of September 1 – December 31, 2023. From 2024 onwards, the whole year will count.
• Cool-off period introduced: Axis Bank has also introduced a cool-off period for points transfer. You can only have one membership number linked to an account for a transfer partner. If you change it, you cannot change it again for at least 60 days. This is to curb mileage brokers and people selling their points.

Analysis

Axis Bank has done what it needed to stop the excess hemming of one of its most popular card products. The fundamental change here is to reward points earning and miles transfer ratios. The card used to offer 31,000 EDGE Rewards points/24,800 Miles for INR 1,00,000 spent, which will now reduce to 6,000 ER points/2,400 Miles effective September 1, 2023, a steep devaluation of 90% if you are one of the people who like to use your ER points for airmiles transfer. However, if you like to use your points for shopping at INR 0.2 value per point, you now get INR 1,200 every month as a reward, compared to INR 6,200 earlier, which is 20% of the earning potential earlier.

Assuming you will go for a Burgundy Relationship, which requires you to keep INR 10 Lakh in the account to avail of the benefits, you will still earn only 4,800 Miles per month on an apple-to-apple comparison for the INR 1 Lakh spend.

Put in another way; EDGE Rewards earned INR 1 Lakh spent now would be only achievable with INR 3.26 Lakhs spent in a month going forward. That, too, with the conversion taking a deep dive.

My Take

Still assessing, honestly, but I am close to the waiver timeline and will find my way to it by the end of this month or next. However, if you have EDGE Rewards points that you intend to use for travel, you are better off converting these into miles before August 31, 2023, to make the most of the currently accumulated EDGE Rewards points you have in your account. For further use, I see the HNIs moving back their spending to HDFC Bank Infinia and American Express in the coming months. Infinia offers a 3.3% Reward rate on an ongoing basis, compared to the 1.2% Reward Rate on Magnus (comparing the cash value of rewards).

Bottomline

Axis Bank has rolled out extensive changes on their Magnus Credit Card, which will go live on September 1, 2023. Key among the changes will be that the 25,000 bonus points per month will go away, and the points transfer ratio will move from 5ER:4 miles/Points to 5ER:2 Miles/Points on September 1. Also, new customers’ fees increase and the annual renewal benefit disappears. Additionally, a max of 500,000 ER can be transferred from AXIS ER to other miles/points transfer partners.

What do you make of the changes to Axis Bank’s Magnus Credit Card? Where is the silver lining, and what will you do with this card product going forward?

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