Just days after the tragic Air India Express crash on June 12, 2025, which claimed over 240 lives and shocked the nation, questions about passenger safety and post-accident support have come to the forefront. In the wake of this disaster, insurance providers and regulators rushed to simplify the claims process for affected families, highlighting the often-overlooked value of built-in travel protections. SBI Card’s recent announcement to end complimentary air accident insurance on several premium credit cards seems poorly timed, even if by chance or announced coincidentally.
Starting July 15, 2025, SBI Card will remove air accident insurance from popular cards like SBI ELITE, PRIME, Pulse, and Miles series. Although this change was likely planned, it comes at a time when the importance of such protections is being closely examined. Additionally, SBI Card will introduce significant changes to billing, including a new Minimum Amount Due (MAD) formula and a new payment allocation order, both of which will alter how users handle repayments and debts.
Discontinuation of Air-Accident Insurance
One major change is the removal of complimentary air-accident insurance, which has been offered on select premium and co-branded cards. Starting July 15, 2025, SBI Card will discontinue this benefit for all SBI-branded cards. Co-branded cardholders will see this change in August 2025, depending on their specific partnerships.
Previously, this insurance provided coverage of up to ₹1 crore for accidental death during air travel on cards like SBI ELITE and SBI Miles Elite, and up to ₹50 lakh for cards such as SBI PRIME, Pulse, and Miles Prime. This removal applies uniformly to both new and existing users, regardless of when the card was issued.
While the air insurance feature wasn’t the main reason for choosing a credit card, it did offer valuable security for frequent flyers. With its removal, cardholders may want to consider getting separate travel insurance policies, especially if they travel internationally or often rely on credit card coverage for emergencies.
Revised Minimum Amount Due (MAD) Structure
Another major update is the change in how the Minimum Amount Due is calculated on monthly credit card bills. Currently, the MAD is generally 5% of the total outstanding balance, which allows users to carry forward most of their dues by paying a small amount each month. However, starting July 15, 2025, SBI Card will implement a stricter formula. Under the new structure, the MAD will include:
- 100% of all finance charges, EMI dues, fees, and taxes,
- Plus 2% of the remaining outstanding retail balance.
This means users will no longer be able to defer EMI installments or charges by making minimal payments. For example, if your total outstanding is ₹20,000 and you have ₹2,500 in charges and EMIs, your MAD will now be much higher than before. The aim here is to encourage faster repayment of debt and reduce long-term interest accumulation, especially for users who often revolve balances.
This new approach may feel abrupt for those used to low minimum payments. However, from a financial discipline perspective, it may help users avoid prolonged debt cycles. Paying only the MAD under the new system could still lead to long repayment timelines up to 85–90 months in many cases—but this change promotes better control over interest liabilities.
New Order of Payment Allocation
In addition to the MAD changes, SBI Card is also updating how payments are allocated across different parts of your bill. Currently, payments are usually applied first to retail transactions, then to EMIs and fees. This can lead to interest and fees compounding if left unpaid over time.
With the new change, all payments will first go toward taxes, finance charges, EMIs, and fees before being applied to product-level spending like shopping or travel transactions. This new payment order follows sound financial practices and helps minimize the compounding effect of hidden charges, particularly for users who make partial payments or carry multiple billing components.
What This Means for SBI Cardholders
These changes reflect a larger trend in the Indian credit card market, where issuers are moving away from less sustainable benefits and tightening risk management on revolving credit. For SBI Cardholders, the message is clear—read your updated card terms, understand your billing breakdown, and make informed repayment choices. If you have a premium card and mainly value the insurance benefit, now might be a good time to decide if the card still meets your needs.
For users managing large balances or on EMIs, planning for a higher minimum due will be crucial going forward. The changes won’t affect rewards, annual fees, or cashback structures for now, but the impact on payment behavior and the perception of benefits could be significant for many users.
Conclusion
Starting July 15, 2025, SBI Card will implement three major changes: ending air-accident insurance on premium cards, modifying the minimum amount due formula, and revising the payment allocation order. While these updates may lower the value for some users, they also encourage a more responsible credit environment. Cardholders need to reassess their repayment habits, explore insurance alternatives as needed, and use their SBI cards more purposefully in light of these changes.
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