Synopsis– SBI Card will discontinue reward points on digital gaming and government transactions from September 1, 2025, affecting select Lifestyle Home Centre cards. The move, driven by low profitability and regulatory concerns, reflects an industry trend. Cardholders should redeem existing points, focus on eligible spends, and consider alternative cards to maximise rewards.
Credit card reward points strongly influence spending choices in India, shaping habits across shopping, dining, and bill payments. SBI Card, a leading issuer, has announced that effective September 1, 2025, transactions on digital gaming platforms and government services will no longer earn rewards—a move reshaping customer benefits.
SBI Card and Its Reward Program
- Market Leadership: SBI Card is amongst the largest credit card issuers in India, with millions of customers across various components of their lives. They have a wide array of products across lifestyle, travel, shopping, and premium, which helps promote their advantage in the crowded credit card space.
- Reward Points System: Central to SBI Card’s value proposition is the reward points program. Cardholders are awarded points based on eligible purchases, and these points can be redeemed for vouchers, merchandise, travel bookings, or statement credit. This incentivises card spending and increases usage.
- Customer Loyalty and Benefits: The reward structure increases customer engagement, which propels loyalty and card usage. By providing customers with tangible benefits from using their card on the things they buy every day, SBI Card encourages users to create habits surrounding usage.
- Program Updates: SBI Card has revamped its rewards scheme periodically to ensure the financial sustainability of the program. Some of the reward categories in December 2024 give evidence of the company’s updated approaches to offering value at a great price.
The Rule Change: What Exactly Is Changing
- Effective Date: The new policy will come into effect on September 1, 2025, giving cardholders time to understand and adapt to the upcoming changes.
- Affected Cards: This revision applies to specific SBI credit cards in the Lifestyle Home Centre series:
- Lifestyle Home Centre SBI Card
- Lifestyle Home Centre SBI Card SELECT
- Lifestyle Home Centre SBI Card PRIME
- Excluded Transaction Categories: From the effective date, two transaction types will no longer earn reward points:
- Digital Gaming Platforms: Purchases of game credits, subscriptions, and in-app items.
- Government-related Payments: Payments such as taxes, fines, and utility bills made through government portals.
- Transactions Still Eligible for Rewards: Regular retail transactions, including shopping, dining, fuel, travel, and lifestyle spends, will continue to earn reward points as before, ensuring most everyday purchases remain incentivised.
Why SBI Made This Move
- Profitability Issues: Banks routinely assess the commercial potential of reward categories. Transactions made through digital gaming platforms and government payments usually have low Merchant Discount Rates (MDRs); therefore, issuers only earn a small amount of revenue. It is financially unviable to offer reward points on these types of spends.
- Regulatory & Risk Issues: Regulatory scrutiny of online gaming transactions is ever-present due to regulatory concerns regarding excessive spending, addiction, and the risk of possible financial loss to the consumer. This makes it sensitive for credit card issuers to incentivise these types of transactions.
- Strategic Focus on High Margin Categories: Excluding low margin categories allows SBI Card to funnel rewards into more profitable segments such as retail, travel and entertainment. Other large banks, such as HDFC, have made similar exclusions, and the industry is moving towards these changes to enhance the viability of reward programs.
Also read: 5 Best Credit Cards for Domestic and International Lounge Access in India 2025
Impact on Cardholders
- Effect on Gamers: Cardholders who frequently purchase digital credits, online passes, or in-app upgrades will no longer earn reward points on these transactions. Gamers may see a noticeable reduction in their rewards accumulation for these categories.
- Effect on Government Payments: Customers using SBI Cards to pay taxes, fines, or utility bills through government portals will also stop earning points on these transactions, impacting those who rely on their card for routine payments.
- Existing Rewards Unaffected: Any previously accumulated reward points remain intact. The change applies only to future transactions after September 1, 2025.
- Potential Behavioural Changes: Some customers may feel less motivated to use SBI Cards for the excluded categories and could explore alternative cards or payment methods that continue to offer rewards in these areas.
Alternatives and What Cardholders Can Do
- Redeem Existing Points: Cardholders should redeem any accumulated reward points from digital gaming or government spending before the new policy takes effect to avoid losing potential benefits.
- Focus on Eligible Categories: Continue using SBI Cards for categories where rewards remain strong, such as shopping, travel, dining, lifestyle, and fuel. These everyday spending can still maximise reward accumulation.
- Explore Alternative Cards: For spending heavily skewed toward gaming or government payments, consider using other credit cards or digital wallets that still offer rewards in these categories.
- Diversify Card Usage: Adopt a strategic approach by using multiple cards based on spending habits. Evaluating card usage by lifestyle needs rather than just reward points ensures maximum overall benefits.
Conclusion
From September 1, 2025, select SBI Cards will no longer earn reward points on digital gaming and government transactions. While this may disappoint some users, it reflects an industry-wide trend toward selective rewards. Cardholders should reassess spending habits, explore alternatives, and optimize card usage to maximize benefits.
Written by N G Sai Rohith
