Indigo launches 6E Rewards – their first co branded credit card with HDFC Bank
Introduction
Indigo airlines is the largest airline in India and has last week launched their first co branded credit card in partnership with HDFC Bank and Mastercard. The card is called Ka-ching and comes in two variants viz 6E Rewards and 6E Rewards XL. This is an interesting development and lets look at the details below
6E Rewards
I guess the only disappointment here is that this is not an Indigo frequent flyer program. That would really have been something and let’s hope it happens somewhere in the future. 6E Rewards is a reward program for spends made on the co-branded credit card. Each 6E Reward point is worth 1 INR and can be converted into Indigo flights only. The base reward rate on the cards is up to 2% and for Indigo spends maxes out at 5%. There are some partners where reward rate is as high as 15%.
So who is this card really for ? These are mid tier cards which offer little value for those already holding a Diners Black / Infinia or even a Diners Club Miles card. You are not really restricted to a single airline and the reward rates are still between 13-33%. This card can become an interesting proposition if the Smartbuy program ends which is increasingly looking more and more likely.
6E Rewards XL
The 6E Rewards XL is the premium version of the credit card and offers the following features
- Annual Fee – INR 2,500 + Taxes
- Welcome Benefit – Air Ticket worth INR 3,000 Plus a one time 6E Prime Voucher (Food / Seat Select & Fast Forward Combo worth INR 699-899 depending on sector)
- Indigo Benefits
- Spend Reward Rate – 5%
- Discounted convenience fee of INR 100 vs INR 250
- Lounge Access (2 Times per quarter at Mastercard Lounges)
- Bonus Categories
- 3% on Dining, Entertainment and Grocery (Subject to a cap of INR 75,000 per billing cycle)
- 2% on all other categories
- Bonus Partners
- Avis – 10% / Netmeds – 8% / 6E Treats – 7% / AVA – 10% / BeU Salon – 15%
- Redemption Fee – INR 100 per pax per booking
6E Rewards
The 6E Rewards is the base version of the credit card and offers the following features
- Annual Fee – INR 700 + Taxes
- Welcome Benefit – Air Ticket worth INR 1,500 Plus a one time 6E Prime Voucher (Food / Seat Select & Fast Forward Combo worth INR 699-899 depending on sector)
- Indigo Benefits
- Spend Reward Rate – 2.5%
- Discounted convenience fee of INR 100 vs INR 250
- Bonus Categories
- 2% on Dining, Entertainment and Grocery (Subject to a cap of INR 50,000 per billing cycle)
- 1% on all other categories
- Bonus Partners
- Avis – 7% / Netmeds – 6% / 6E Treats – 5% / AVA – 6% / BeU Salon – 10%
- Redemption Fee – INR 100 per pax per booking
Our Take
While the cost of the first year is taken care of by the complimentary air ticket and a one time 6E Prime voucher, the welcome benefit looks to be only a one time offer. From the second year onwards it will start pinching. Let us look at a hypothetical scenario to calculate total benefit here with the Indigo 6E Rewards XL Card
- Indigo Spends – 2 Flights Per Quarter – 5,000 x 8 = INR 40k = INR 2,000 rewards
- Cost of card = INR 2,500 + 18% GST = INR 2,950
- Ticket Benefit = INR 3,000 – INR 100 (Redemption Fee)
- 6E Prime Benefit = INR 899 (Assuming Max Benefit)
- Convenience Fee Benefit – 150 x 8 = INR 1,200
- Lounge Access – 800 x 8 = INR 6,400 (Assuming you don’t have a card with lounge access already
If we offset the Cost of the card with the Ticket Benefits which is only valid for the first year it leads to a reward rate of around 26% (Benefits of INR 10,400 on spends of INR 40,000). However, this reward rate is heavily skewed by the cost of Lounge access. The eligibility for the XL Card is salary of INR 120,000 per month. At this level of salary, most individuals will already have a card which gives lounge access. The net reward rate then comes at a more acceptable 10% (Benefits of INR 4,999 on spends on INR 40,000). If the welcome 6E Prime benefit is counted as a one-off for the first year only, then the card reward rate comes at 8% which is not bad. The reward rate for the regular card peaks at 12% and can bottom at around 7% for the same scenario described above.
Conclusion
This 6E Rewards XL will be a great card for someone who does not have a lounge access card and regularly travels via Indigo. The regular 6E Rewards card can be a great beginner card for someone who is just starting in the points and miles space like students. Given the scale of operations of Indigo, you can save 8 to 10 percent on your spends towards future travel. At present it is an invite only card but the floodgates should soon open once the product goes through its initial launch phase. What do you think ?
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