The surge in COVID-19 has forced everyone to pause and re-evaluate their physical health. People have now begun giving utmost importance to their health and that of their loved ones. As a result, the spending on the health and wellness category has grown rapidly since March 2020. Looking at this trend, various banks have launched health and wellness credit cards during the pandemic. These cards come with an annual fees. Let’s evaluate the value of rewards and benefits alongside the annual charges.
What’s on offer
Health and wellness credit cards provide benefits and discounts on health services and check-ups, consultations with doctors and other specialists, pharmacies, etc. YES bank launched self-care wellness credit cards for consumers by partnering with MasterCard in March 2021. “This credit card not only helps with finances but also provides additional benefits like complimentary annual preventive health check-ups, complimentary fitness sessions, and accelerated rewards on spending at pharmaceutical stores,” says Anubhav Gupta, Vice President, Business Development of MasterCard. Also, those who spend considerably on gyms and fitness sessions (Zumba, Yoga, etc.) may also benefit from this card as there are free workout sessions offered by partners.
For instance, SBI Card Pulse offers FITPASS annual membership, unlimited online doctor consultation, annual basic health check-up, 5X reward points while spending on pharmacies, etc. Similarly, Axis Bank Aura Credit Card offers online consultation with doctor through Practo, interactive online fitness sessions via Fitternity, annual discount of up to Rs 500 on health check-up, etc. (refer to table). The annual fees are between Rs 499 to Rs 2,999.
“At SBI Card, we have observed that health and wellness have emerged as one of the key spend categories for customers in the COVID-19 pandemic. So, any customer looking to derive greater benefits related to healthcare and wellness and maximize the value of her spends on related categories are our target customers,” says Rama Mohan Rao Amara, MD and CEO of SBI Card.
“The banks are targeting people in age band of 21 to 60 years and with a minimum monthly salary of Rs 25000,” adds Raj Khosla, founder and MD of MyMoneyMantra.com.
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What works
On regular shopping, travel and reward credit cards, you do not get health and wellness benefits. Also, banks are offering perks from co-branding partners such as Apollo hospitals for doctor’s consultation, health check-up, purchasing medicines from Apollo pharmacy, etc.
These credit cards offer preventive health check-ups once is a year costing around Rs 3,000 and access to gyms or fitness studio costing between Rs 12,000 to 15,000 annually. The cardholders can register for a fitness program from the partner using the app, consult a doctor and a nutritionist, etc. “The value customer gets is up to Rs 60,000 using our wellness plus credit card,” says Rajanish Prabhu, Business Head, Credit Cards at Yes Bank. He adds, about 60-65 percent customers are actively using the card. There are couple of reasons: first, customers are getting accelerated rewards while spending at a pharmacy using this card and, second, its wholesome wellness benefits.
Some banks have kept annual fees at a lower end. For instance, Axis Bank Aura credit card charges annual fees of Rs 749 plus taxes. “We have kept the price point reasonable compared to peers,” says Sanjeev Moghe, EVP and Head Cards & Payments, Axis Bank.
Some banks allow you to apply for a separate wellness credit card if you hold a credit card in another segment. “There will be a floater credit limit shared between existing credit card and a wellness credit card issued,” says Moghe. For instance, at an account level, there will be credit limit of Rs 2 lakh floating between two credit cards of different segments.
What doesn’t
These cards do not offer shopping and travel benefits as provided by regular credit cards. Another drawback is these credit cards may not have tie-ups with large established hospitals and wellness chains. “Also, most people prefer to visit a regular doctor for general consulting, eye and dental check-up in the city. So, a randomly recommended doctor through the partnered app for a check-up will not be appreciated by the customers,” says Tushar Jain, a personal finance blogger at www.jaintushar.com.
According to experts in the industry, the banks are targeting it to niche segment of customers with health and wellness credit cards. However, Moghe from Axis bank has a different view. He says, “If banks would have launched health and wellness credit cards five years ago, then it can be considered as a niche segment. We now see this as a large segment and expect to grow from here on.”
“There are some banks which are now adding health and wellness features for their customers for a limited period on all-round credit cards. It’s because the banks have recognised customers are spending on these categories,” says Ajay Awtaney, founder and editor, LifeFromALounge.com. For instance, HDFC Bank had announced double reward points while spending at a pharmacy from July 2021 to September 2021. Similarly, American Express has rolled out free health check-ups for Amex Platinum Card members by partnering with online aggregator.
“As all-rounder credit cards are building up features around health and wellness category. I would rather spend on those credit cards where it is one of the many categories rather than spending on a new category of a credit card,” says Awtaney.
Should you apply?
Unlike shopping or travel credit cards, which are available in plenty, there are only a handful of cards that offer rewards on health and wellness spends. So, the options for these cards are very limited.
Customers applying for this card may spend in a limited manner in this category. These credit cards come with annual fees and therefore one should evaluate medical expenses before applying. “In case one has regular medical expenses and needs doctor consultation regularly, these cards are a good choice. However, if the medical requirement is once in a while, one should look at cost-benefit analysis basis lower annual fee,” says Khosla.
“As these cards focus on health and wellness spends, they offer limited benefits to other regular lifestyle spends,” says Sachin Vasudeva, Associate Director & Head of Credit Cards, Paisabazaar.com. He adds, before applying for one of these credit cards, like one should do for any card, carefully consider how much you would be able to save through the card.
