The Axis Bank Magnus Credit Card Devaluation: A Deep Dive into What Went Wrong

For quite some time now, the Axis Bank Magnus credit card was definitely a formidable rival in the domain of premium credit cards within India. And I recall well when this card was introduced and gained momentum as a card with an amazing value proposition.

It was one of the cards which made us want to carry it in our wallets due to its great features on travel, lifestyle, and other spending. However, as in everything in life, change is inevitable, but not always for the better.

The downgrade of the Axis Bank Magnus credit card has been an extensively discussed issue in the credit card community, and rightly so as it affected many high-spenders and luxury travelers.

The Glory of Magnus Card

Before going through the details of changes made in the card, it is necessary to give some background information on why the Magnus card was so good in the past. For me, the Magnus card was a premium passport that gave me exclusive privileges.

The major reason why I opted for the Magnus was its monthly target benefit. If I spent Rs. 1 lakh in a single calendar month, I would receive an unbelievable 25,000 Edge Reward Points. These reward points could be converted to a partner airline or hotel program with the impressive ratio of 5:4. I am talking about the huge value of these points which may range from Rs. 10,000 to more per month simply due to meeting my spending target. This meant that there was 10% of my Rs. 1 lakh spending coming back in cash in a month.

The other benefit of the card was the unlimited access to domestic and international lounges, sometimes even with guest access privilege. The general reward ratio of the card was impressive and the foreign exchange markup was relatively lower at only 2%.

Changes after the Devaluation Hammer Drops

I remember that day when the announcement came, probably in mid-August 2023. It was like a collective shock among the credit card holders. Axis Bank decided to implement certain changes that really knocked the benefits out of this card. It was not a small change but the fundamental alteration of the card that affected almost all the benefits of the card. So here's what really happened in the process of the alteration of the card.

1. End of Monthly Expense Allowance

Benefit before the alteration: Spend Rs. 1 lakh during a month and receive 25,000 Edge Reward Points.

The change: This benefit was removed completely for all the cardholders, starting from September 1, 2023.

In all honesty, it was quite shocking to me. The fact that this particular benefit is no more is the reason why the value of the card decreased significantly. Just imagine how much you can lose annually spending the sum of Rs. 1 lakh per month?

2. Altered Reward Point Earning and Redemption

Old System: You can earn 12 Edge Reward Points for every Rs. 200 you spend (or 60 points for every Rs. 1000). Those points could be converted into miles/points in various airline and hotel partners in the ratio 5:4. In other words, 5 Edge Points were equal to 4 partner Miles/Points.

New System (for Axis Bank Account holders): You get 60 Edge Reward Points per Rs. 200 spent if you have an Axis Bank Savings Account with a certain relationship value.

New System (Non-Axis Bank Account Holders): For those who don’t have a qualifying Axis Bank account, you get only 12 Edge Reward Points for every Rs. 200 spent.

Hold on though, as there's something else! While the above changes affected the earning rate of some people, the transfer ratio of points to the partners has been seriously downgraded. The ratio of the conversion of points in partners went from a relatively better 5:4 to a worse 5:2 ratio for most partners.

3. Limitations to Lounge Access 

Old Advantage: Unrestricted domestic and international lounge access, along with guest access. This was because the guest access component made it a true luxury product as the person could bring his companions to the lounge.

New Reality: Although the primary cardholder is eligible for un-restricted lounge access, the facility of guest access has been withdrawn.

This particular change affected me personally in a huge way and I am sure it has affected many others as well. Having to travel with family or friends and not being allowed to take them to the lounges would make traveling a totally different affair. There are added costs involved or the need to carry two cards.

4. Increased Markup on Foreign Transactions

Old Advantage: Relatively competitive 2% markup on foreign exchange transaction.

New Reality: It has been raised to 3.5% including GST.

This particular change would affect those who use their credit card to pay for transactions done overseas or for purchases online in foreign currency.

5. Annual Fee and Waiver Conditions

Annual fee is still Rs. 12,500 + GST. Although this fee was not altered, the loss of monthly milestone rewards, combined with reduced points value has made it very difficult to justify this expensive annual fee. It used to be easy enough to earn more than just covering the annual fee through milestone benefits alone. Now, the way to waive or justify this fee has completely changed.

My Perspective on These Changes

It is obvious that it affects the biggest spenders and frequent travelers who have been making use of the benefits offered by this card. You are the person who has been spending Rs. 1 lakh per month, will now be losing Rs. 1 lakh in value every year. This cannot be considered as small money for any individual. International travelers, and people entertaining guests in lounges are other examples of affected individuals.

Personally speaking, this card has now become the card which I am considering very carefully for future use. It has ceased to be my primary card for expenses.

Where do I stand now? Options to Consider

As with me, I am sure you too are considering other options in light of this devaluation. The premium card market has definitely taken a hit with this devaluation. Cards that are worth considering now include:

HDFC Diners Club Black/Infinia: These are quite high on reward points, good on redemption, and have lounges, making them strong candidates.

Amex Platinum Charge Card: Though having a very high annual fee, its perks are experience-related and quite high on value.

SBI Card ELITE: A mid-range card but still quite good on benefits for annual fees paid.

Others' premium cards: Based on individual spend profile and preferred loyalty program, there could be a solution from other banks as well.

In my current approach, it is about adding more diversity in my card portfolio. This means that I am trying to search for a card that will give me good returns on my general expenses, a travel card and perhaps, a card for my particular category spends. Although it takes up more effort, it appears to be absolutely necessary at present.

The Axis Bank Magnus credit card, which used to be a leader in its class, is certainly not as high up as before. While it has some perks, the same cannot be said about its wide range and great value that it used to offer. It shows how easily the most attractive credit card benefits can be withdrawn.