Co-branded, cashback and utility perks: Most popular credit cards of 2023

s cashback came out as an easy way to earn value-back, rewards credit cards also went through an overhaul to match up to the value potential of cashback cards.

Till a few years ago, the majority would view credit cards as a means to purchase big-ticket items on EMIs and complement their monthly cashflow. Since most credit cards then featured basic reward structures, with no particular focus on spend-based savings, it wasn't easy to find the right card that aligned with their needs. However, with the e-commerce boom and proliferation of the internet, most card issuers introduced credit cards inclined towards practical needs like online shopping, dining, travel, movies, groceries, etc., and consumers soon began to realise the saving potential of credit cards.

The introduction of cashback credit cards was also a game-changer for the credit card industry. Where most credit cards were based on the reward points model with very low value-back on spends, cashback credit cards directly offered a percentage of your spends back into your account. As cashback became an easy way to earn value-back, rewards credit cards also went through an overhaul to match up to the value potential of cashback cards.

 

Research studies from different banking institutions and fintech reveal that Indian users prefer cashback credit cards, prioritising spending categories like groceries and fuel. Rising fuel costs made users looked for credit cards offering fuel surcharge waivers. A new trends of bookings going up for domestic travel saw traction in travel cards offering benefits like airport lounge access and discount on bookings.

Many Indian users also preferred zero joining fees and annual fees, or cards with easy fee waivers. 

"Confident in their credit prowess, Indians are increasingly utilising credit cards for substantial purchases, driven by incentives like reward points, cashback offers, no-cost EMIs, and premium lifestyle rewards. This trend is evident in the consistent uptick in average transaction volumes," said Adhil Shetty, CEO of Bankbazaar. 

Cards launched in partnership with popular brands

Of late, card issuers have realized the potential of co-branded credit cards as they capitalize on consumers’ loyalty for already established brands across multiple categories like airlines, travel portals, e-commerce, lifestyle, etc.

"Among travel, there are multiple credit cards co-branded with leading airlines like Vistara, Indigo, SpiceJet, Air India, Etihad, etc. as well as those co-branded with portals like MakeMyTrip, Yatra and EaseMyTrip. Travellers not only get higher value on spending with the associated airline but also get additional benefits via complimentary memberships, lounge visits, travel insurance and more," said Rohit Chhibbar, Head of Credit Cards, Paisabazaar.

Axis Vistara Signature Credit Card, for example, offers up to four premium economy class tickets on reaching spend milestones of up to Rs 9 lakh in a year. Similarly, cards like Standard Chartered EaseMyTrip can help users save big on booking flights and hotels with EaseMyTrip.

"Similarly, with more consumers turning to online shopping for big and small purchases, co-branded cards like Kotak Myntra, Amazon ICICI, Flipkart Axis, etc. hold good value for those who mostly shop online with the associated brands. Apart from co-branded benefits, the basic value-back rate on these cards is usually good too," said Chibbar.

Swiggy HDFC Bank Credit Card and EazyDiner IndusInd Credit Card offer co-branded benefits in the dining category.

Value-back on Indispensable Expenses like Utilities and Grocery

While most credit cards exclude utility bill payments from their rewards structure, some cards are specifically designed to provide value back on this indispensable expenditure. For instance, Airtel Axis Bank Credit Card offers 10% cashback on Utility bill payments such as electricity, water, gas via the Airtel Thanks app. Similarly, Axis Ace Credit Card gives 5 per cent unlimited cashback on making utility bill payments via Google Pay, as per data analysed by Paisabazaar.

Groceries and departmental store spends are another major part of consumers’ monthly spends. Issuers have launched cards in collaboration with popular stores like Nature’s Basket, Reliance, etc. offering accelerated earnings to users on their spends, which can later be utilized to offset future expenses.

Paisabazaar has curated a list of the top 10 cards based on the best cards offering maximum value back across categories for the fees they are charging, it doesn’t include premium and super premium cards.

 

"While credit cards traditionally held sway in significant expenses like travel, electronics, dining, and shopping, the year 2023 witnessed a notable transition toward features that directly cater to everyday needs. Users embraced responsible credit utilisation, digital innovations, and security-oriented choices, indicating a maturing and well-informed credit card environment in India," said Adhil Shetty, CEO of Bankbazaar.

As per RBI data (2023), credit card issuers increasingly offer adjustable credit limits based on spending patterns, promoting responsible credit usage.

According to a Crisil report (2023), rural credit card demand is rising, with cards offering agricultural benefits and lower fees gaining popularity.

An Experian study (2023) indicates that urban users prioritize cashback, travel perks, and lifestyle benefits like dining and entertainment co-brand cards.

"“In 2023, overseas travel spend on our credit cards witnessed a 25 per cent increase, driven by benefits such as best-in-class forex mark-up rates, lounge benefits and offers on online ticketing portals. In fact, spends in the affluent segment increased by more than 30% driven by overseas travel and luxury fashion. We also saw a 20% increase in spends in dining, food and grocery category due to our accelerated cashback benefits. Another interesting data set was that spends for customers between age group of 18 years and 25 years old, digitally savvy Gen Z, grew by 2X over 2022, driven largely by higher cashback benefits for online spends," said Sandeep Batra, Head, Wealth and Personal Banking, HSBC India

BankBazaar report in June highlighted how India’s credit card market is booming, with over 8.6 crore credit cards in circulation as of April 2023, marking a 15 per cent increase from the previous year's 7.5 crore cards. The average monthly spending per card rose by 9.37 per cent.  These trends paint a clear picture of how Indian credit card preferences evolved in 2023. 

 Paisabazaar, in research, found that 37 per cent of new credit score consumers are under 25. The report titled 'Making India Credit Fit'  said that this generation manages more than three active credit accounts as they approach their late 20s.