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

In the last few months, some banks have made changes to their credit card reward program and introduced or increased fees for some services. In September 2024, HDFC Bank made changes to its credit card reward program. In November 2024, ICICI Bank made changes, and now Yes Bank has made changes effective from 1st December 2024. So, what are the changes that Yes Bank has announced, and how will they impact credit cardholders? Let us understand. 

Capping on reward points redemption for flights and hotel bookings

From 1st December 2024, Yes Bank will limit the number of Yes reward points that can be redeemed for booking flights and hotel accommodation. The limit will be either 70% of the total invoice value or a specified number, depending on the credit card that you hold. The limits for various credit cards are as follows:

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

HDFC Bank has had similar limits for the redemption of credit card reward points for booking flights and hotel accommodation through its SmartBuy portal for quite some time. HDFC Bank credit cardholders can redeem 70% reward points for the above bookings, and the balance amount has to be paid with 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 charges

Apart from limiting the reward points that can be redeemed for specified services, Yes Bank has made some changes to the fees and charges levied for specified services. The details of the changes applicable from 1st December are as follows.

Auto debit return charges

In the case of auto-debit failure, the credit cardholder will be levied auto-debit return charges of 2% of the net payable amount or Rs. 450, whichever is higher. Hence, it is recommended that you maintain a sufficient balance in your bank savings account for the credit card monthly bill payment.

Late payment charges

Yes Bank will levy late payment charges, per statement, as follows.

Finance charges

The finance charges on revolving credit on retail transactions, on cash advance and/or on overdue amount will be levied at 3.99% per month. It translates into charges of 47.88% per annum. The above finance charges are applicable for the following credit card variants:

• Yes First Preferred
• Yes First Business
• Elite+
• Select
• Yes First Preferred
• Yes First Business
• Yes Prosperity Business
• Wellness Plus
• BYOC

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

Higher spends requirement for complimentary domestic airport lounge access

Effective 1st April 2025, to avail complimentary domestic airport lounge access, the amount required to be spent will be revised. Based on the amount spent in the previous quarter, the cardholder will qualify for complimentary lounge access in the subsequent quarter.

The amount required to be spent to qualify for complimentary lounge access for various card variants is as follows.

The quarter in which the amount is required to be spent and the subsequent quarter for availing the lounge access is as follows.

The number of complimentary lounge access that can be availed remains the same as applicable on the card variant held.

Why are banks linking complimentary lounge access to card spends?

In the last few years, many banks have launched multiple credit cards with complimentary airport lounge access as a feature. Earlier, the complimentary lounge access was not linked to any qualification criteria in terms of monthly or quarterly spends required. It resulted in overcrowding at various domestic airport lounges. While the lounge access is free for the cardholder, the bank has to pay the lounge operator every time its cardholder accesses the lounge.

Hence, many banks have now either reduced the number of complimentary lounge visits and/or linked the complimentary access to a specified 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 complimentary lounge access to the cardholder.

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

To summarise, effective 1st December 2024, Yes Bank has put a limit of 70% on the redemption of reward points for booking flights and hotel accommodation, and revised the fees for auto-debit return, late payment and finance charges. Effective 1st April 2025, Yes Bank has increased the quarterly spends requirement to up to Rs. 1 lakh to unlock complimentary domestic airport lounge access in the subsequent quarter.

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