ICICI latest bank to restrict lounge access. These non-premium credit cards come to the rescue

ICICI Bank is the latest major bank to restrict lounge access for its card users. ICICI credit card holders will now need to spend ₹75,000 every quarter to unlock complimentary lounge access in the subsequent quarter. 

Earlier this year, Axis Bank and HDFC Bank had also introduced minimum quarterly spending caps of ₹50,000 and ₹1 lakh, respectively, on select cards to unlock lounge access on them. 

A senior bank official of a leading bank informed Mint that the lounge is increasingly becoming a loss-making feature given the increase in cardholders using their cards for lounge access. Banks buy lounge access in bulk depending on the eligible cardholders and previous years trends of how many of the users actually use them. With usage volumes shooting up, after paying the lounge and the card network, banks have started making losses. To restrict the usage, banks are introducing curbs in the form of minimum spending thresholds.

Restrictions on the ICICI Bank credit cards mainly impact users of non-premium cards with lower spending. For instance, MakeMyTrip ICICI credit card allowed eight complementary domestic lounge visits annually until spending threshold was introduced. It was a good deal for a card with only a ₹1,000 fee, which would be negated by the ₹1,000 MMT voucher given as a joining benefit. But now, the user has to spend an average of ₹25,000 every month to unlock two visits every quarter.  

Which non-premium cards give no-frills lounge access?

Ankush Setia, a credit card expert and former founder of a fintech startup focused on credit cards, pointed out that only a select few non-premium cards allow no-frills lounge access. 

“Almost all LTF (lifetime free) or low fee cards have minimum spend requirements to unlock lounge visits. However, their spending caps are smaller compared to what major banks have introduced. For instance, two LTF cards with lounge access are Scapia and IDFC Select with quarterly spending requirements of ₹10,000 and ₹20,000, respectively,” he said.

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Unlimited lounge visits are now allowed only on some premium and super-premium cards like Axis Atlas, HDFC Infinia, HDFC Diners Club Black and ICICI Emeralde Private. Premium and super-premium cards are those with annual fee over ₹5,000 and stringent eligibility requirements to get the card. These are most suitable for those with high annual spending. 

However, all is not lost for travellers who do not have these super premium cards but use domestic lounges frequently. A few cards with a fee of ₹1,000-3,000 offer lounge access without spending restrictions. Some of these cards also reverse or waive fees under some conditions that can make them free of cost cards. 

Sumanta Mandal, founder of Technofino says Bob Eterna is one such card. “At only ₹2,499 fee (18% GST extra), you get unlimited lounge access,” he said. The fee is reversed when the cardholder spends ₹25,000 in the first 60 days of activating the card. 

Even if the fees are not waived, a ₹500-1,500 annual fee on a card is a better proposition than paying ₹1,000-2,000 at the lounge for each visit. 

As a special limited-time offer, annual fee of AU ixigo credit card, which gives 16 lounge visits in a year, is currently waived off by the bank. “AU ixigo is a catch for lounge access currently. I expect the bank to add some spending requirements for lounges sooner or later,” said Setia. 

Mint has listed five lifetime free and low-fee credit cards offering domestic lounge access suitable for those who use the facility frequently.

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Lifetime free cards with minimum spending requirement

Scapia

Unlimited domestic lounges unlocked on monthly spends of ₹10,000. Earlier, the minimum spend threshold was ₹5,000. 

Reward rate: 

• 4% on hotel and flights booked on Scapia app
• 2% on all spends made outside Scapia app. Spends that are exempted from earning rewards include rent, wallet loading, card bill payment, forex transactions, EMIs, education, gift cards.
• Rewards can be used to book hotel, flights on Scapia app

Other benefits:

• Zero forex markup fee on international spends

IDFC Select 

Two domestic lounge visits unlocked on spending at least ₹20,000 per month. 

Reward rate: 

• In a monthly cycle, 0.5% reward rate earned on monthly spends till ₹20,000, after which 1.67% rate. 
• However, for the accelerated reward rate applicable after ₹20,000, rental and property management will continue to earn 0.5% rate, whereas utility, insurance, government services, education and wallet load will earn 0.17%.
• 0.17% reward rate on utilities and insurance premium.
• No reward on fuel, EMI transactions, & cash withdrawals.
• Reward points can be used to pay for online or store purchases
• Redemption fee of ₹118 (18% GST included) applicable on each redemption.

Other benefits:

Two monthly Buy One, Get One offers on movie tickets up to ₹125 on Paytm mobile application. 

Low-fee cards with no spending restrictions

AU Ixigo 

Annual fee: ₹1,179 (includes 18% GST); currently waived as a limited-time offer

16 lounge visits in a year

Reward rate:

• 0.5%-5% reward rate on booking bus, flight and train on Ixigo platforms, UPI transactions done with Rupay credit card, other online and offline purchases.
• Rewards can be redeemed as Ixigo Money that can be used to spend on the platform, other products and services that include e-gift cards, merchandise, cinema tickets, recharges, and more from a range of online and offline merchants and e-vouchers.   
•  Fuel, wallet loading, jewellery, rent and insurance are exempted from earning rewards.

A maximum of 10,000 reward points can be earned in one month.

Other benefits:

• Zero forex markup fee on international spends

Bob Eterna 

Fee: ₹2,949 (includes 18% GST); joining fee reversed on spending ₹25,000 in the first 60 days. Renewal fee waived on spending ₹2.5 lakh annually. 

Unlimited domestic lounge access

Reward rate:

• 0.75%-3.75% reward rate. Travel, dining and regular online spending earn the highest 3.75% reward rate, but a maximum of 5,000 rewards can be earned in these categories in one month. 
• 20,000 reward points given as milestone benefit on spending ₹5 lakh in a year

Other benefits:

One monthly Buy One, Get One offer on movie tickets, capped at ₹250, booked on Paytm mobile application.

PNB Rupay select

Fee: ₹590 (includes 18% GST) on joining; 
₹885 annual fee; waived if card used once every quarter 

 Two domestic lounges per quarter

Reward rate

• 0.33% reward rate on retail purchases. Fuel, cash withdrawals and jewellery are exempted from earning rewards.
• Reward points can be used to spend on PNB Rewardz portal, which allows phone and DTH recharge, movie bookings and travel-related bookings.
• A minimum of 500 reward points required for redemption.

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