Yes Bank’s new credit card rules: how the December 2024 changes will affect you

In recent months, some banks have made changes to their credit card rewards programs and introduced or increased fees for some services. In September 2024, HDFC Bank made changes to its credit card rewards program. In November 2024, ICICI Bank made changes, and now Yes Bank has made changes effective from December 1, 2024. What are the changes that Yes Bank has announced, and how will they impact credit card holders? Let’s understand.

Restriction on redeeming reward points for flights and hotel bookings

From December 1, 2024, Yes Bank will limit the number of Yes loyalty points that can be redeemed for booking flights and hotel accommodation. The limit is 70% of the total bill value or a certain number depending on the credit card you own. The limits for different credit cards are as follows:

The above changes to Yes Rewardz points redemption are in addition to the existing limit of 50% of points available for redemption against statement credit and gift cards.

HDFC Bank has been applying similar limits for redeeming credit card points for booking flights and hotel accommodation through its SmartBuy portal for some time now. HDFC Bank credit card holders can redeem 70% reward points on the above bookings and the balance has to be paid using HDFC credit cards. Now, Yes Bank has also introduced a similar change by putting limits on the reward points that can be redeemed for booking flights and hotel accommodation.

Changes in fees and costs

In addition to limiting the rewards points that can be redeemed for certain services, Yes Bank has made some changes to the fees and charges charged for certain services. The details of the changes that will apply from December 1 are as follows.

Direct debit costs

In case the direct debit fails, the credit card holder will be charged a direct debit fee of 2% of the net amount payable or Rs. 450, whichever is higher. Therefore, it is recommended that you maintain sufficient balance in your bank savings account for the monthly payment of the credit card bill.

Late payment fees

Yes The bank charges late payment fees per statement as follows.

Financial costs

The financing costs on revolving credit on retail transactions, on advances and/or on overdue amounts are charged at 3.99% per month. This translates into costs of 47.88% per year. The above financing costs apply to the following credit card variants:

• Yes, first preference
• Yes first act
• Elite+
• Select
• Yes, first preference
• Yes first act
• Yes prosperity company
• WellnessPlus
• BYOC

It is recommended that you always pay your entire monthly credit card bill on or before the due date to avoid the high finance charges.

Higher spending requirement for free access to domestic airport lounges

With effect from April 1, 2025, the amount to be spent will be revised to benefit from free access to lounges at domestic airports. Based on the amount spent in the previous quarter, the cardholder is eligible for free lounge access in the following quarter.

The amount to be spent to qualify for free lounge access for different card variants is as follows.

The quarter in which the amount must be spent and the subsequent quarter for using the lounge access is as follows.

The number of complimentary lounge access that can be used remains the same as applicable to the card variant used.

Why do banks link free lounge access to card spend?

In recent years, many banks have launched multiple credit cards with free airport lounge access. Previously, the complimentary lounge access was not linked to qualification criteria in terms of required monthly or quarterly spend. It resulted in overcrowding in several domestic airport lounges. While lounge access is free for the cardholder, the bank must pay the lounge operator every time its cardholder accesses the lounge.

As a result, many banks have now either reduced the number of free lounge visits and/or tied free access to a certain amount spent in a month/quarter. The revenue earned from the amount spent by the cardholder to unlock lounge access compensates the bank to some extent for providing free lounge access to the cardholder.

Like Yes Bank, other banks have also linked domestic airport lounge access to credit card spend in a month/quarter. For example, ICICI Bank has increased the quarterly spending amount for lounge access from Rs. 5,000 to Rs. 35,000 (April 2024) onwards up to Rs. 75,000 (November 2024).

In summary, Yes Bank has imposed a 70% limit on redeeming reward points for booking flights and hotel accommodation, effective December 1, 2024, and revised direct debit, late payment and finance charges. With effect from April 1, 2025, Yes Bank has increased the required expenditure per quarter to Rs. 1 lakh to unlock free access to lounges at domestic airports in the subsequent quarter.

Gopal Gidwani is a freelance personal finance content writer with over 15 years of experience. He can be reached at LinkedIn.