Credit card companys cut lounge access at airports

Often, when frequent travellers take credit cards, the offer of free lounge access at airports is a big consideration. Estimatedly, every month, around 10 lakh people use the free lounge service at the airport via their credit cards.

But in addition to offering limited lounge access, banks and credit card companies have made significant changes to their rules when it comes to accessing airport lounges. For instance, take the HDFC Bank’s Regalia credit card. Till date, there were no conditions on lounge access via this card. But starting 1st December, only those users who spend a minimum of Rs 1 lakh in the previous quarter via their Regalia credit card will be eligible for lounge access.

HDFC bank has also announced limiting the complimentary lounge access offered to individuals. Now, even those meeting the quarterly spending limits will be eligible for a maximum of 2 complimentary lounge visits.

If you wish to seek complimentary lounge access internationally, you will have to apply for a priority pass after meeting the desired spending limits. In this case, individuals will only be eligible for complimentary lounge access only 6 times in a year. If one wishes to gain lounge access after this, they can do so by paying $27 plus GST.

Now, let’s understand why banks are changing their rules on free lounge access. Banks have to incur significant expenses in order to provide their customers with free airport lounge access. In case you wish to access an airport lounge without a credit card, you will have to dish out anywhere between Rs 800 to Rs 2,500. But when you avail lounge services through your credit card, the issuing bank will have to bear this expense. In recent times, these costs have significantly inched up for the banks.

According to airport service aggregator company DreamFolks, until 2 years back, banks only had to pay an average of Rs 600 per visit to airport lounges. Between July-September 2023, this inched up to Rs 990 per visit, indicating a 65% rise in cost in just 2 years.

With increase in air traffic, banks are finding giving free lounge access to be a financial challenge. Many customers, who might not be regular credit card users also utilize the free lounge access facility. The banks are unable to earn anything from such customers, which is why banks are setting a specific criteria that every customer, who wishes to obtain free lounge access, has to meet within a fixed time period.

Let’s understand this through an example. Users of IDFC First Bank’s lifetime free credit card can utilize free lounge access only if they have spent at least Rs 5,000 in the previous month using the card.

Similarly, ICICI Bank’s Sapphiro and Rubyx card users can get lounge access only if they have spent Rs 5,000 in the previous quarter using the card. Additionally, some banks have altogether removed the free lounge access facility from their credit card’s list of features. For instance, SBI Card, in order to cut costs, has eliminated the free lounge access facility from its SBI cashback credit card. If you are taking a credit card to gain lounge access, make sure you’ve read all terms and conditions carefully. Understand how much you are required to spend for the same, and only then opt for the credit card.