How travel cards build bank relationships

The Indian premium credit card market is evolving, with banks tying access to high-value travel-reward cards to the customer's broader relationship with the bank. Instead of standalone credit cards, banks are positioning these cards as relationship products for affluent customers. For instance, HDFC Bank's Infinia card, which has historically been a top choice for serious points collectors, will now require customers to maintain annual spending of Rs.18 lakh or a relationship value of Rs.50 lakh in the current financial year to retain access.

Similarly, Axis Bank's Magnus for Burgundy credit card is tailored for Burgundy Wealth Management relationship holders, offering enhanced rewards when the customer's financial relationship with the bank is substantial. HSBC's Premier credit card is also limited to HSBC Premier customers who meet specific criteria, such as maintaining a quarterly total relationship balance of Rs.50 lakh or having a net monthly salary credit of Rs.3 lakh.

For travel rewards enthusiasts, the benefits of premium credit cards are significant, as points can be converted into airline miles or hotel loyalty points with partner benefits. However, the new relationship model may exclude customers who do not meet the bank's relationship thresholds, even if they have high incomes and good credit scores.

This shift indicates that the credit card's value is no longer solely determined by its reward rate but by the combination of the card's benefits and the customer's relationship with the bank. For banks, this approach helps in acquiring and retaining high-value customers, making the credit card an essential tool for the overall relationship.