Checked 4 August 2026 against Axis Bank card revision notices, SBI Card's PhonePe card term revisions and ICICI Bank's published changes page.
Reward exclusions are old news. What changed in 2026 is that three issuers expanded the exclusion lists at roughly the same time, converged on roughly the same categories, and — in Axis Bank's case — took a second step that gets much less attention than it deserves.
The second step is this: a spend can be excluded from earning rewards while still counting toward the annual or quarterly threshold that unlocks a benefit. Removing it from the threshold calculation as well is a separate decision, and Axis has now made it on the SELECT card.
If you have been reaching a fee waiver or milestone partly through utility, insurance or rent payments, that is the change to read first.
The two kinds of exclusion
| What it removes | How you notice | |
|---|---|---|
| Earn exclusion | Reward points on that transaction | A statement line with no points against it |
| Threshold exclusion | The transaction's value from a qualifying-spend total | A milestone or waiver you expected does not trigger |
The first is visible per transaction. The second is invisible until the moment a benefit fails to arrive, by which point the qualifying window has usually closed. That asymmetry is why threshold exclusions matter more than their coverage suggests.
Axis Bank: gift cards, tolls, and the SELECT threshold
Effective 28 August 2026, eight Axis notices state that gift-card purchases move out of the "Wallet" spend category into a separate category titled "Gift card". They continue to earn nothing. What the reclassification carries with it varies by card:
| Card | Gift-card spend also excluded from |
|---|---|
| MYZONE | Milestone benefits |
| SELECT, PRIVILEGE | Spend-based fee waiver and milestone benefits |
| MAGNUS for BURGUNDY, RESERVE | Spend-based fee waiver |
| NEO, MAGNUS, OLYMPUS | No further exclusion stated |
The same eight notices add that "no rewards shall be earned on spends made on Bridge Fees, Road Fees & Tolls".
Then, effective 1 October 2026 and on SELECT only, the threshold exclusion. The ₹3 lakh anniversary-year spend that unlocks 6 additional international lounge visits, 6 additional golf rounds and Priority Pass renewal will no longer count "spends made on existing excluded merchant categories which do not earn reward points". The notice names them:
Insurance, rent, fuel, educational services, utilities & telecom, wallet, Gold/Jewellery, government services and gift card.
Nothing about the ₹3 lakh figure or the benefits changes. What changes is which rupees count toward it. A SELECT cardholder who reached ₹3 lakh with, say, ₹80,000 of insurance and utility payments inside it now needs ₹80,000 of qualifying spend elsewhere to reach the same benefit.
SBI Card: PhonePe card caps and a merchant-code list
Effective 1 July 2026, SBI Card revised both PhonePe co-branded cards. The caps tightened:
| PhonePe SBI Card SELECT BLACK | PhonePe SBI Card PURPLE | |
|---|---|---|
| Eligible PhonePe spends, before | Max 2,000 RPs/month | Max 1,000 RPs/month |
| Eligible PhonePe spends, after | Max 500 RPs on insurance + max 1,500 RPs on other spends | Max 250 RPs on insurance + max 750 RPs on other spends |
| Eligible online spends, before | Max 2,000 RPs/month | Max 1,000 RPs/month |
| Eligible online spends, after | Max 1,000 RPs/month | Max 750 RPs/month |
Note the structure of the PhonePe-spends change: a single cap became two sub-caps, and the sub-caps do not add up to the old ceiling on either card. On SELECT BLACK, 2,000 becomes 500 plus 1,500 — the same total only if your spending happens to split exactly that way, and lower otherwise. A cap is a ceiling and not an entitlement, which our cashback cap explainer works through in detail.
Both notices then carry an identical exclusion table, and unusually for issuer communication it publishes the merchant category codes:
| Spend type | MCC |
|---|---|
| Tolls and Bridges | 4784 |
| Gifts and Souvenir | 5947 |
| Jewellery | 5094, 5944 |
| Educational Institutions | 8220 |
| Utilities (non-PhonePe App spends) | 4900, 4814, 4899 |
| Insurance (non-PhonePe App spends) | 5960, 6300, 6380 |
| UPI (non-PhonePe App spends) | — |
Published codes are genuinely useful, because they let you test a transaction rather than argue about a category name. MCC 4784 is the same code that sits behind the Axis toll exclusion. Our MCC explainer covers how to find the code on a disputed transaction and who assigns it.
ICICI Bank: rent, e-wallets and the utility reclassification
ICICI Bank's published changes page carries two older but still-operative rules. From 5 February 2024, "rent pay and e-wallet loading transactions will not accrue any reward points", excluding the Amazon Pay ICICI Bank card. From the same date, government transactions are classified as utility payments — a reclassification rather than an exclusion, which means they follow whatever utility treatment the specific card applies.
These predate the 2026 wave, and they matter here for one reason: ICICI got to the same place first, and the two-year gap shows the direction is settled rather than experimental.
What the three lists have in common
Lining up the named categories across the three issuers:
| Category | Axis (SELECT threshold) | SBI Card (PhonePe) | ICICI Bank |
|---|---|---|---|
| Tolls and bridges | ✓ (earn) | ✓ | Not named |
| Gift cards | ✓ | ✓ (gifts and souvenir) | Not named |
| Jewellery / gold | ✓ | ✓ | Not named |
| Education | ✓ | ✓ | Not named |
| Utilities and telecom | ✓ | ✓ (non-app) | Reclassified |
| Insurance | ✓ | ✓ (non-app) | Not named |
| Rent | ✓ | Not named | ✓ |
| Wallet loading | ✓ | Not named | ✓ |
| Government services | ✓ | Not named | Reclassified as utility |
| Fuel | ✓ | Not named | Not named |
The overlap is not coincidence. These are the categories where the interchange an issuer earns is thin or capped, so a reward paid on them comes out of the issuer's own margin. That economics is stable, which is a reasonable basis for expecting the lists to keep growing rather than shrinking.
It also means the headline reward rate on a card is now a weaker predictor of what you will actually earn than the exclusion list is. Our redemption value guide covers the second half of that calculation — what the points you do earn are worth in rupees.
How to audit your own position
| Step | What to do |
|---|---|
| 1 | List your last three months of spend by category, from statements rather than memory |
| 2 | Mark each category against your card's current exclusion list |
| 3 | Total the excluded rupees — this is the spend earning nothing |
| 4 | Check whether your card's fee waiver or milestone threshold still counts them |
| 5 | If it does not, recompute the qualifying total and the shortfall |
| 6 | Decide before the window closes, not after the benefit fails |
Step 4 is the one people skip. An earn exclusion and a threshold exclusion are stated in different places, sometimes in different documents, and often with different effective dates — Axis has them 34 days apart on SELECT. Our annual fee waiver audit works through the threshold side of this, including why chasing a threshold can cost more than the fee it avoids.
Primary sources
- Axis Bank SELECT revision notice — gift-card reclassification, toll exclusion, and the 1 October 2026 threshold exclusion with the named categories
- Axis Bank PRIVILEGE revision notice
- Axis Bank MYZONE revision notice
- Axis Bank RESERVE revision notice
- SBI Card: PhonePe SBI Card SELECT BLACK revisions
- SBI Card: PhonePe SBI Card PURPLE revisions
- ICICI Bank: upcoming changes to credit card features and charges
Frequently asked questions
If a spend earns no rewards, does it still count toward my fee waiver?
It depends on the card, and the two rules are stated separately. On Axis SELECT, excluded categories stop counting toward the ₹3 lakh anniversary threshold from 1 October 2026. On other cards you have to read the fee-waiver terms and the reward-exclusion terms as two different documents.
Are these exclusions retrospective?
The notices state effective dates and do not describe retrospective application. Points already earned in a category before its exclusion date are a separate question from whether new spends earn — check the wording of the notice for your card.
Why do the same categories keep appearing across issuers?
These are categories where issuer interchange revenue is thin or capped, so rewards paid on them are funded from the issuer's own margin. The economics is the same for every issuer, which is why the lists converge.
The merchant looked like a normal shop but earned nothing. Why?
Reward eligibility follows the merchant category code the acquirer assigned, not the shop's name or what it sells. SBI Card's notices publish the specific codes, which makes them checkable.
Do the two PhonePe sub-caps add up to the old cap?
Only if your spending splits exactly along the sub-cap boundary. On SELECT BLACK the old 2,000 RP ceiling became 500 RP on insurance plus 1,500 RP on other spends, so most spending patterns will earn less than before.
Does an exclusion list apply to my add-on card too?
Exclusions attach to the account's terms, and add-on card spends post to the same account. See our add-on card explainer for how shared limits and liability work.
This is neutral reporting of published issuer notices, not tax or personal financial advice. Exclusion lists are extended by notice and the documents above are served from URLs updated in place, so check your own card's current terms before relying on a category earning or counting.
