However, industry participants note that a meaningful portion of these benefits remains unutilised, particularly in premium segments where redemption conditions and user behaviour play a key role.
Estimates cited by industry experts suggest that nearly 70% of credit card users fail to maximise rewards, with underutilisation more pronounced in structured, premium-linked benefits.
Where the gap is most visible
According to Adhil Shetty, CEO of BankBazaar.com, the gap between offered and realised value is most evident in benefits that require active user engagement.
He noted that while premium cards carry high headline value, actual usage is shaped by awareness and behaviour. Features such as lounge access, travel vouchers and milestone rewards often come with spend thresholds, validity limits or partner conditions, which restrict full utilisation.
He added that simpler formats like cashback tend to see higher redemption, compared to travel- or category-linked perks.
Benefits most frequently left unused
Industry experts point to a consistent pattern in underutilisation across certain categories.
Raj Khosla, Founder and MD of MyMoneyMantra.com, highlighted that reward redemptions such as air miles, milestone-based vouchers, insurance covers and lounge access are among the most commonly underused benefits.
He attributed this to factors such as expiry periods, spending thresholds, limited awareness of insurance-linked benefits, and increasing eligibility conditions for lounge access.
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Behavioural and structural drivers
Underutilisation is largely explained by a mix of behavioural and design-related factors.
Khosla noted that users often focus on visible or immediately usable benefits, while overlooking rewards that require planning, tracking or advance booking. He also pointed to expiry windows, blackout dates and redemption complexity as additional constraints.
Adding a structural perspective, Santosh Agarwal, CEO of Paisabazaar, said misalignment between card choice and actual spending patterns is a key reason for low utilisation.
He observed that some consumers select premium cards based on aspirational value or introductory offers, without assessing whether their spending behaviour matches the reward structure, leading to sub-optimal redemption.
How value is typically assessed
Industry participants suggest that the effectiveness of a premium credit card is measured by the extent to which realised benefits exceed the annual fee.
Shetty indicated a benchmark of 1.5x to 2x value-back on annual fees as a reasonable expectation for optimisation.
Agarwal further outlined a usage range, with basic utilisation matching the fee value, moderate usage delivering around 2x returns, and higher optimisation reaching 3x–5x through planned spending and structured redemption.
Outlook
While premium credit cards continue to offer multiple layers of benefits, industry views indicate that actual value extraction varies significantly across users. The gap is primarily driven by awareness levels, redemption complexity and alignment between card features and spending behaviour, resulting in a portion of benefits remaining unclaimed each year.
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