Axis Bank Reward Devaluation 2025 — What Changed and What It Means

Bottom Line: In June 2025, Axis Bank moved from MCC-based reward tracking to its own internal spending categories — meaning transactions that previously earned rewards may no longer qualify. If you hold an Axis card, you need to reassess whether your spending pattern still earns what you think it does.

What Actually Happened

On 20 June 2025, Axis Bank rolled out one of the most significant reward structure changes in recent Indian credit card history. The bank stopped using Merchant Category Codes (MCCs) — the 4-digit international codes that classify every card transaction — and replaced them with Axis Bank’s own internal spending categories.

This matters more than it sounds.

Under the old system, if a merchant was coded as MCC 5812 (restaurants), you earned dining rewards. Period. The system was transparent, standardised, and predictable. Under the new system, Axis Bank decides internally whether a transaction counts as “dining,” “travel,” “online shopping,” or something else entirely. The criteria are opaque, and the bank has full discretion.

In practical terms: a payment at a food court inside a mall might have earned dining rewards before. Now, it might be classified under “retail” and earn nothing. You won’t know until after the statement posts.

The Specific Changes That Hurt

Reward Eligibility Is Now Category-Based

Rewards are structured around four broad buckets: dining, travel, fuel, and online shopping. Anything outside these categories earns either reduced rewards or nothing at all. The problem? The boundaries of these categories are defined by Axis, not by the global MCC system.

Spend-Based Fee Waivers Changed Too

The annual fee waiver criteria — which many cardholders rely on to keep premium cards free — now exclude certain spending categories. Transactions that previously counted toward your annual spend threshold may no longer qualify. This is a quiet change that could cost you Rs 500 to Rs 10,000 depending on your card variant.

Flipkart Axis Bank Card Got Hit Hard

The Flipkart Axis Bank Credit Card, one of India’s most popular co-branded cards, saw its value proposition shrink considerably. Cashback on non-Flipkart/Myntra spending dropped, and the 1Finance review from early 2026 put it bluntly: if Flipkart and Myntra represent less than 20% of your total card spending, alternatives likely provide superior value. For a card that millions signed up for as an everyday spender, that’s a significant downgrade.

Axis Supermoney RuPay — January 2026 Follow-Up

Axis didn’t stop in June. Effective 1 January 2026, the Supermoney RuPay card got its own set of revised terms. The changes appear minor on paper but meaningfully reduce real-world earning rates, particularly for UPI-linked transactions — which was the card’s main selling point for many users.

Before vs After: A Quick Comparison

Feature	Before June 2025	After June 2025
Reward classification	MCC-based (global standard)	Axis internal categories (opaque)
Dining rewards	Any merchant with MCC 5811/5812	Only if Axis classifies it as “dining”
Fee waiver spend calculation	Most transactions counted	Certain categories excluded
Flipkart Axis cashback (non-partner)	1.5% on most spends	Reduced; category-dependent
Transparency	High — MCC is public	Low — Axis decides internally
Predictability for cardholder	You could check MCC in advance	You find out after the fact

Why Banks Keep Doing This

Axis isn’t alone. SBI, HDFC, and ICICI have all tightened reward policies over the past 18 months. The Economic Times reported on this trend explicitly — issuers are facing margin pressure as UPI eats into transaction volumes and RBI tightens interchange fee structures.

The playbook is consistent:

Launch a generous card to acquire customers
Build a large base of active cardholders
Gradually reduce rewards once switching costs are high (auto-debits, EMIs, credit history tied to the card)

The MCC-to-internal-category switch is particularly clever because it lets banks reduce rewards without announcing a rate change. The rate stays the same on paper — 2 Edge Rewards per Rs 200, or whatever — but fewer transactions qualify. The headline number doesn’t change. The actual value does.

What You Should Do Now

Step 1: Audit your last 3 statements. Check which transactions actually earned rewards under the new system. Compare with what you expected. The gap will tell you how much value you’ve lost.

Step 2: Recalculate your effective reward rate. If you were getting 1.5% back effectively, you might now be at 0.8% or lower. That changes whether the card is worth holding, especially if there’s an annual fee.

Step 3: Check your fee waiver math. If you rely on spend-based fee waivers, confirm that your qualifying spend still crosses the threshold under the new excluded categories.

Step 4: Consider alternatives. The HDFC Infinia and Diners Club Black still use MCC-based systems (for now). The IDFC First Select offers straightforward reward rates without category games. The SBI Elite, despite its own devaluation history, remains relatively transparent.

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Frequently Asked Questions

When did the Axis Bank reward changes take effect?

The primary changes took effect on 20 June 2025. Additional card-specific changes (like the Supermoney RuPay revisions) followed on 1 January 2026.

What is the MCC-to-category change?

Previously, Axis used global Merchant Category Codes to decide if a transaction earned rewards. Now they use their own internal classification system, which is less transparent and gives Axis more control over what qualifies.

Is the Flipkart Axis Bank card still worth it?

Only if a significant portion of your spending (at least 20%) goes to Flipkart or Myntra. For general-purpose spending, the card’s value has dropped enough that alternatives like the IDFC First Select or HDFC Millennia may serve you better.

Did Axis Bank reduce the reward rate?

Not explicitly. The points-per-rupee rate on paper is largely unchanged. But because fewer transactions now qualify for rewards under the new category system, your effective reward rate has dropped.

Can I check which category my transaction falls under?

Not reliably before making the purchase. Axis Bank’s internal categories are not publicly mapped the way MCCs are. You’ll typically see the classification only after the transaction appears on your statement.

Should I close my Axis Bank credit card?

Don’t close it impulsively — that affects your credit score and total available credit limit. Instead, stop using it as your primary card if the rewards no longer justify it, and shift spending to a card with better effective returns. Keep the Axis card open with occasional small transactions to maintain the credit line.