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SBI Credit Card Updates: Insurance Benefits, Billing Terms, and More

No more free air insurance, higher minimum due, and new payment terms starting July 2025

Pardeep Sharma

In July 2025, SBI Credit Card users are facing a wave of important changes. These updates affect insurance benefits, billing calculations, and how payments are processed. The goal appears to be encouraging more responsible usage and timely repayments. However, these changes may also increase monthly outflows and reduce the overall value for many users. 

Here’s a detailed look at all the major updates that have taken effect. 

1. Removal of Free Air Accident Insurance 

One of the most significant changes is the removal of the complimentary air accident insurance cover. This change applies to several premium SBI Credit Cards and is effective from July 15, 2025

Earlier, select SBI Cards provided a free air accident insurance cover ranging between ₹50 lakh and ₹1 crore. This cover protected cardholders in case of accidental death during air travel, making it a valuable benefit for frequent flyers. 

Affected Cards and Coverage Previously Offered: 

SBI Card Elite – ₹1 crore 

SBI Miles Elite – ₹1 crore 

SBI Miles Prime – ₹1 crore 

SBI Card Prime – ₹50 lakh 

SBI Pulse – ₹50 lakh 

The removal of this insurance means that cardholders no longer get automatic protection while traveling by air. This benefit was especially useful for those who traveled regularly and preferred not to purchase separate travel insurance. 

Additionally, for co-branded SBI Cards like UCO Bank SBI Card Elite and Prime, the insurance benefit will end starting August 11, 2025

Implication: Travelers will now need to buy standalone travel insurance policies if they want this level of protection. It’s also likely that many will begin comparing other credit cards that still offer such perks. 

2. Changes in Minimum Amount Due (MAD) Calculation 

From July 15, 2025, SBI Cards have introduced a new method to calculate the Minimum Amount Due (MAD) on credit card bills. 

Previously, the MAD was calculated as a small percentage (usually 5%) of the outstanding amount. Under the new system, the calculation is more complex and includes several components in full. This change results in a higher monthly payment obligation, even if only the minimum amount is being paid. 

New Minimum Amount Due Structure Includes: 

100% of Goods and Services Tax (GST) 

100% of any EMI installments 

100% of late payment fees, over-limit charges, and other fees 

100% of finance charges (interest) 

100% of any over-limit amounts 

2% of the remaining balance 

Impact: This update makes it harder to carry forward large outstanding balances by paying just the minimum. It forces users to pay a more meaningful part of their dues each month. The move encourages faster repayment but also increases pressure on those with high balances. 

3. Revised Payment Allocation Rules 

Another major change is the new payment settlement hierarchy. This defines how SBI Credit Card applies payments made by cardholders. 

Under the updated rules, any payment made will first go toward certain charges before it is used to reduce the principal on retail purchases or cash advances. 

New Order of Payment Allocation: 

GST 
 
EMI dues 

Fees and penalties (late payment, over-limit, etc.) 

Finance charges (interest) 

Balance transfers 

Retail transactions (purchases) 

Cash withdrawals 

Effect of This Change: In the past, payments were often applied to the balance carrying the highest interest first. Now, even if payments are made on time, retail spends or cash advances might still attract interest if earlier dues like EMI or charges are unpaid. This change can cause continued accumulation of interest and make it harder to fully clear the credit card balance. 

4. Why These Changes Matter 

These updates have a significant effect on how credit cards are used and managed. 

Higher Minimum Payments: With the new MAD calculation, monthly bills are heavier. A cardholder with outstanding EMIs, over-limit charges, or finance charges will now have to pay more each month to stay compliant. 

Interest Charges Could Increase: Since payments are now used first to settle taxes and fees, retail spends could remain unpaid. This can result in interest being charged on purchases, even when some payment has been made. 

Loss of Travel Insurance Protection: Many cardholders used the air accident insurance as a backup for travel emergencies. With the removal of this feature, additional spending may be needed to get similar protection. 

Encouragement for Better Payment Habits: SBI’s intention seems to be promoting full payments and discouraging rolling over balances. While this promotes financial discipline, it could burden those already struggling with repayments. 

5. Long-Term Implications 

These changes point toward a shift in how SBI Cards wants customers to handle their credit. 

For cardholders with good repayment history: 

Likely to continue paying bills in full, so changes will not significantly affect them. 

May be disappointed by the loss of benefits like travel insurance. 

For those who often pay minimum due: 

May face higher bills and quicker debt accumulation due to interest on unpaid balances. 

Could be forced to reduce card usage or switch to cards with more flexible repayment terms. 

On choosing new cards: 

The removal of valuable perks may prompt users to compare SBI Cards with other banks’ offerings. 

Cards that retain travel insurance, offer better cashback, or provide interest-free periods could become more attractive. 

6. Tips to Manage the New Rules 

To avoid falling into a cycle of debt and increased interest charges, it is important to adapt to the new billing rules. Here are some steps that can help: 

Pay full bill amount whenever possible. Avoid relying on minimum payments. 

Track monthly spending. Stay within a safe credit utilization range (preferably below 30% of the credit limit). 

Avoid cash withdrawals using credit cards. They attract high interest from day one. 

Set auto-payment reminders. Ensure bills are paid before the due date. 

Re-evaluate card benefits. If older features like insurance or lounge access are removed, it might be time to switch. 

Final Thoughts 

The SBI Credit Card updates from July 2025 mark a significant shift in how billing and benefits are handled. While these changes aim to promote better financial discipline, they also reduce the overall reward and protection value of premium cards. Cardholders must now pay closer attention to their monthly statements, avoid minimum-only payments, and consider alternative travel protection options. 

For those with responsible payment habits, the impact may be minimal. However, those carrying large balances or relying on partial payments may face higher interest charges and reduced financial flexibility. Understanding the new rules and adjusting usage accordingly will be key to making the most of SBI’s credit offerings moving forward. 

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