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HDFC Bank Overhauls Premium Credit Cards: New Rules and Fees
HDFC Bank is making several changes to its popular Regalia Gold and Diners Privilege credit cards. These updates, effective May 15 and July 1, aim to encourage more customer spending and manage costs. While adjusting reward points and benefits is common in the industry, these changes come as HDFC Bank faces significant market attention regarding its overall stability.
Reward Points Drop, Fees Rise for Cardholders
Starting May 15, Regalia Gold cardholders will earn 5 points per ₹200 spent, a shift from the previous 4 points per ₹150. This means fewer points on everyday purchases, although bonus rates in certain categories are unaffected. The fee for Dynamic Currency Conversion (DCC) on international transactions paid in Indian Rupees will increase to 1.75%. Additionally, a new ₹199 fee will apply for replacing lost or stolen cards. These adjustments are intended to boost revenue and manage the expenses tied to card benefits.
Lounge Access Now Tied to Spending
From July 1, free domestic airport lounge access for both Regalia Gold and Diners Privilege cards will depend on spending. Regalia Gold cardholders must spend ₹60,000 in the previous quarter to keep their allowance of three domestic lounge visits per quarter. International lounge access through Priority Pass is not affected by this new spending requirement. Diners Privilege cardholders will also need to meet the ₹60,000 quarterly spending target to receive their three lounge vouchers (two domestic, one international), which must be claimed through the SmartBuy platform. This change directly ties premium perks to how much customers spend.
HDFC Bank in a Tough Credit Card Market
The Indian credit card market is highly competitive, with rivals like ICICI Bank, Axis Bank, and SBI Card offering premium products with perks such as unlimited lounge access and high rewards. HDFC Bank's own INFINIA card is a leader in the ultra-premium tier. By introducing spending thresholds for lounge access on cards like Regalia Gold and Diners Privilege, HDFC Bank may be aiming to more clearly distinguish its product tiers. This could encourage customers to spend more on their current cards or upgrade to higher-tier options. The strategy seeks to make rewards programs more cost-effective while deepening customer engagement. The Indian credit card market is growing rapidly, with over 111 million cards in circulation as of June 2025. While cashback remains popular, personalized rewards are gaining ground.
Will Customers Stay? Governance Issues Loom
However, these changes carry potential risks. New spending requirements for lounge access could disappoint some premium cardholders who don't meet the criteria, potentially leading them to switch to competitors offering more straightforward benefits. These credit card adjustments are also happening alongside significant governance issues at HDFC Bank. Recent problems include the sudden departure of its chairman over ethics concerns and the firing of executives for alleged mis-selling, which have contributed to a sharp drop in the bank's stock price. With market attention largely on these governance matters, customer loyalty could be tested if the bank is seen as reducing the value of its premium cards, especially given existing uncertainties.
Analysts See Value Despite Stock Woes
Despite recent stock declines, some analysts remain positive on HDFC Bank's valuation. JPMorgan recently upgraded the bank to 'Overweight,' seeing a potential 33% upside and setting a price target of ₹1,010. They note that the bank's valuation is at its lowest point since the April 2022 merger, trading at about 1.5 times its projected FY28 book value, a 16-year low. Jefferies maintains a 'Buy' rating with a target of ₹1,240. How HDFC Bank manages these credit card strategy changes while rebuilding investor trust after governance issues will be crucial. The success of the card revisions will depend on finding a balance between cost savings and keeping key customers, alongside the bank's efforts to restore market and investor confidence.