Common credit card exclusions - learning to read the fine print.

Credit cards in India have become far more than just a convenient way to make payments. They offer rewards, cashback, travel privileges, insurance covers, and access to exclusive experiences. However, behind all the glossy offers and marketing buzzwords lies a layer of fine print that many cardholders ignore until it’s too late. Understanding what’s not covered or what’s excluded from your credit card’s benefits is just as important as knowing what’s included. These exclusions can make the difference between enjoying a benefit and being denied it when you actually need it.

Let’s take a closer look at some of the most common exclusions that apply to Indian credit cards, across categories like reward points, insurance covers, cashback programs, lounge access, and liability protection.

Reward points exclusions

Reward programs are one of the biggest attractions for credit card users. You earn points on every purchase and later redeem them for travel, vouchers, or merchandise. However, not every transaction earns points. Almost every card issuer in India lists certain categories that are excluded from reward accumulation. For example, utility bill payments, fuel purchases, wallet loads, and government transactions are often excluded.

A common example is wallet loading. If you use your credit card to add money to Paytm, PhonePe, or any other wallet, you might not get any reward points. Similarly, payments towards rent using platforms like CRED or NoBroker may not qualify for points or cashback. Many banks, such as HDFC Bank, SBI Card, and ICICI Bank, explicitly mention that fuel spends, insurance premium payments, and EMIs are excluded from reward calculations.

Another subtle exclusion applies when you redeem your points. The value of reward points may differ based on where you redeem them. For example, redeeming for flight tickets or hotel stays may give better value than using them for statement credit. Reading the redemption terms ensures you don’t lose out on potential value.

Cashback exclusions

Cashback cards seem straightforward — spend and get a percentage back. But the exclusions can be tricky. Many cashback cards in India exclude certain spend categories such as government services, fuel, education, insurance, and utility payments. For example, Axis Bank’s ACE Credit Card offers 5% cashback on bill payments through Google Pay, but this excludes rent and wallet recharges. Similarly, some cards have monthly caps on cashback or restrict it to specific merchants or apps.

Another important exclusion is the “no cashback on EMIs” clause. When you convert your purchases into EMIs, many issuers treat them as financial transactions, not purchases, making them ineligible for cashback or points. If you’re planning to make a large purchase and convert it into EMI, always check if it still qualifies for the cashback advertised.

Insurance benefits exclusions

Most premium and travel credit cards offer complimentary insurance benefits, such as air accident cover, lost baggage protection, or purchase protection. However, these insurance policies come with their own exclusions.

For instance, the complimentary travel insurance usually applies only when the flight ticket is purchased using that specific credit card. If you book using another payment method or through an OTA that doesn’t charge the card directly, you might not be eligible. Similarly, baggage delay or loss claims often require proper documentation from the airline.

Purchase protection — which covers items bought with your card against theft or damage — also comes with strict conditions. There may be a maximum claim limit, and exclusions for wear and tear, electronic malfunctions, or losses due to negligence. Additionally, coverage often applies only within a specific period, such as 90 days from the date of purchase.

Even personal accident covers on some cards have exclusions such as death due to pre-existing illness, participation in hazardous sports, or under the influence of alcohol. Always go through the insurance certificate or policy wording available on your card issuer’s website.

Fuel surcharge waiver exclusions

Many credit cards in India advertise a fuel surcharge waiver, typically 1% on fuel purchases. However, the waiver has limits and exclusions too. The waiver usually applies only at select petrol pumps or for transactions between specific amounts, say between Rs 400 and Rs 4000. Additionally, the service tax and GST on the surcharge are often not refunded. Some banks also have a monthly cap on the waiver, like Rs 250 per statement cycle.

If you use your card at an automated fuel dispenser or a non-participating outlet, the waiver might not apply at all. It’s a small detail but can make a big difference if you refuel frequently.

Airport lounge access exclusions

Lounge access is one of the most marketed perks of premium and travel cards. However, many users discover that their “unlimited access” isn’t truly unlimited. Domestic lounge programs often require the use of specific networks such as Visa, Mastercard, or RuPay. If your card is a different variant or your network changes, access may be denied.

Moreover, some cards allow only a limited number of complimentary visits per quarter, after which you’re charged per visit. Family members or supplementary cardholders may not have the same access privileges. International lounge access is even more restrictive. Cards using the Priority Pass or DreamFolks programs usually limit the number of free visits, and in some cases, only the primary cardholder qualifies for them.

Payment protection and fraud liability exclusions

Credit cards come with zero liability protection for unauthorized transactions, but there are exclusions to note. The protection applies only if you promptly report the loss or fraud. If you delay reporting, or if the transaction was authenticated by OTP or PIN, the bank might hold you liable.

Similarly, if a fraudulent transaction is conducted because you shared sensitive details or fell for a phishing scam, the liability clause may not protect you. Always read your bank’s customer liability policy — the Reserve Bank of India mandates them to publish these details.

Other overlooked exclusions

There are several smaller exclusions that can also catch you off guard. For example, interest-free grace periods often don’t apply to cash withdrawals. The moment you withdraw cash, interest and fees start accumulating from day one. Also, late payment fees and over-limit charges are often excluded from any waiver offers.

Even reward or cashback reversals can happen if you cancel or return a purchase. If you used a card for a large shopping transaction and later returned the items, the rewards earned will be clawed back.

Why reading the fine print matters

The fine print in credit card terms isn’t just legal jargon — it’s a roadmap that tells you how to get the most from your card. Indian credit card issuers are required to provide a “Most Important Terms and Conditions” (MITC) document. This document includes details about fees, charges, exclusions, and policies. Spending ten minutes reading it before applying or activating a card can save you unpleasant surprises later.

In a market filled with cards offering 10x rewards, unlimited cashback, or complimentary travel benefits, the exclusions define the real value you get. Before you swipe your card for that next big purchase or flight booking, take a moment to understand what your card covers and what it doesn’t. The fine print may not be exciting, but it’s the part that protects your wallet.