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Credit Cards: A Journey of Rewards and Risks
This blog post explores the benefits and potential pitfalls of credit cards, emphasiz...
If you use a credit card, several changes that took effect on April 1, 2026 could affect how you transact, earn rewards, and manage your credit. As the new financial year begins, regulators and banks have introduced updates that reshape how credit cards are authenticated, monitored for tax purposes, and rewarded.
From stronger transaction verification and closer scrutiny of high-value spending to revised reward structures and lounge access conditions, these changes may influence how cardholders use their cards. Here’s a look at the key credit card changes that came into effect from April 1, 2026.
1. Mandatory two-factor authentication for all card transactions
The RBI’s Authentication Mechanisms for Digital Payment Transactions Directions, 2025, came into force on April 1. Under these rules, all credit card transactions, whether online or at point of sale, must now be verified using at least two independent factors: something you know (a PIN or password), something you have (your device or card), or something you are (a biometric).
Crucially, at least one of these factors must be dynamic, meaning it changes with every transaction. OTPs continue to qualify as a valid dynamic factor. The RBI has built in flexibility for low-risk, small-value transactions, so not every swipe will require additional steps. For high-value or unfamiliar transactions, however, expect an extra layer of verification.
2. High-value credit card spending under Income Tax scrutiny
Under the Income Tax Act, 2025, which took effect from April 1, credit card spending is now more tightly linked to your tax identity. Annual credit card spending of Rs 10 lakh or more through digital modes may be reported to the Income Tax Department under the Statement of Financial Transactions (SFT) framework. Cash payments of Rs 1 lakh or above through credit cards are also under monitoring.
These reporting norms existed in some form before, but enforcement under the new framework is expected to be far more consistent. If your declared income and credit card spending diverge significantly, it may attract scrutiny.
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3. PAN mandatory for all new credit card applications
From April 1, banks will not process any new credit card application without a valid PAN. Updated application forms now also require date-of-birth verification in addition to Aadhaar. This measure ties credit card issuance directly to a verified financial identity, reducing the possibility of fake accounts and identity mismatches.
4. Credit card statement now valid as address proof for PAN
A credit card statement issued within the last three months is now accepted as valid proof of address when applying for a PAN card. This simplifies documentation for applicants who may not have a utility bill or other traditional address proof readily available.
5. Personal expenses on corporate cards now taxable
If you use a company-issued credit card for personal expenses, those amounts are now classified as a taxable perquisite in your hands from this financial year. Work-related spending — travel, client meetings, official events — remains tax-exempt, but only if backed by proper documentation. Employers will need to maintain clear records of business versus personal usage.
6. Weekly credit score reporting kicks in
From April 1, banks and NBFCs are required to report borrower data to credit information companies every seven days. This means your credit score will now reflect your repayment behaviour far faster than before. A missed payment can show up in your credit profile within a week rather than a month.
7. SBI Card: Rent payments no longer earn reward points
SBI Card has discontinued the accrual of reward points on rent payments across several of its cards from April 1. The cashback cap on the SBI Cashback Card has also been revised, from Rs 5,000 to Rs 4,000 per statement cycle — with a sub-limit of Rs 2,000 for online spends and Rs 2,000 for offline spends. Government transactions, tolls, and digital gaming are excluded from cashback earning.
8. ICICI Bank: Lounge access now spend-linked
ICICI Bank has moved complimentary domestic airport lounge access to a spend-linked model. Cardholders must now have spent a minimum of Rs 35,000 in the preceding calendar quarter to unlock lounge access for the following quarter.
9. Axis Bank and Yes Bank: Revised reward and fee structures
Axis Bank has capped reward points on insurance premium and utility bill payments. Yes Bank has introduced a transaction fee of 1% plus GST on rent payments made via third-party platforms. Cardholders who rely on these categories for reward accumulation should check revised terms carefully.
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What this means in practice
The April 2026 changes reflect two parallel trends. On the regulatory side, there is a clear push toward tighter authentication, greater tax transparency, and faster credit reporting. On the bank side, reward programmes are being tightened as the economics of points-on-everything become harder to sustain.
For most cardholders with clean finances and linked PANs, the regulatory changes will largely run in the background. The more immediate impact will be felt in how rewards are earned, particularly on rent, utilities, and insurance. If you have built your credit card strategy around those categories, now is the time to revisit which card still works for you.
For decisions specific to your financial situation, consult a Qualified Financial Advisor..
