SBI PhonePe Credit Card Devaluation July 2026: Reward Caps Cut on SELECT BLACK & PURPLE

After the recent devaluations to popular credit card for utilities like Airtel Axis Credit Card, SBI PhonePe credit cards were slowly becoming a popular alternatives among users. But SBI has now announced a revision to rewards structure, that's as close to a devaluation as it can be.

Effective 1 July 2026, PhonePe SBI Card SELECT BLACK and PURPLE credit cards have reduced reward caps in key categories and introduce new exclusions for earning Reward Points.

These changes weaken value for many existing cardholders, particularly those who make large insurance or online spends.

TL;DR: Changes & Devaluation to PhonePe SBI Card from June 2026

According to an updated “Reward Program” document filed with SBI Card, the following alterations will apply from 1 July 2026:                     

In addition, SBI Card is adding new exclusion categories, spends which will no longer earn any reward points. These include:

• Tolls & Bridges
• Gifts & Souvenirs
• Jewellery purchases
• Educational institution fees
• Utilities paid outside the PhonePe app
• Insurance premiums paid outside the PhonePe app
• UPI transactions via non-PhonePe apps

The full list of Merchant Category Codes (MCCs) involved is published in SBI’s April 27, 2026 “e-kit” of Reward Terms & Conditions.

Devaluation to Specific SBI PhonePe Credit Card Variants

PHONEPE SELECT BLACK SBI CREDIT CARD

• Reward structure remains: 10 RP/₹100 on eligible PhonePe spends (recharges, insurance, utilities, etc.), 5 RP/₹100 on other online spends, and 1 RP/₹100 on “other spends.”
• New caps reduce earning potential significantly in high-spend categories: for example, insurance via PhonePe now yields only up to ₹5,000 spend per month under rewards (10% rate capped at 500 RPs).
• Annual fee of ₹1,499 + taxes; fee waiver requires previous year spend of ₹3,00,000. Welcome benefit: PhonePe gift voucher worth ₹1,500.

PHONEPE SELECT PURPLE SBI CREDIT CARD

The PURPLE variant faces analogous devaluations. For example, its online spend reward cap drops to 750 RPs/month, while insurance via PhonePe becomes capped at 250 RPs/month under the new terms.

Official Source vs. Public Reports: PhonePe SBI Credit Card Devaluation

The primary source is SBI Card’s revised Reward Program document (“e-kit”), effective 27 April 2026, which details the new caps, MCC exclusions, and other term changes.

Why This Devaluation Matters to Regular Cardholders in India?

These revisions reduce the maximum rewards that many users could earn earlier:

• For insurance spends via PhonePe under SELECT BLACK, the previous cap of ₹20,000/month eligible for 10% rewards is now effectively limited to ₹5,000. That’s a 75% cut in rewardable insurance spend.
• Online spending cap (5% category) is halved from 2,000 to 1,000 RPs/month, so many high online spenders will see significant loss.
• New exclusions mean certain spends, including education fee payments, jewellery purchases, or paying utilities outside the PhonePe app, will no longer generate rewards.

About PhonePe SBI Credit Cards

The PhonePe SBI Card program was launched in 2025, in two variants, SELECT BLACK and PURPLE, as a co-branded credit card with SBI Card.

The cards offer accelerated rewards under PhonePe spends, plus benefits like lounge access, fuel surcharge waivers, milestone vouchers, and more.

What Cardholders Should Do

If you hold either the SELECT BLACK or PURPLE card, consider the following:

• Review whether your spending pattern makes you worse off, especially if you pay large insurance premiums or frequently spend online beyond the new caps.
• From 1 July 2026 onwards, ensure you route eligible purchases through the PhonePe app if you want rewards; outside-app spends may earn none (for certain categories).
• Track monthly spending categories, reward cap resets by calendar month, not necessarily statement cycle.
• Compare alternatives: other SBI cards (or cards from competing issuers) may now offer better value for your mix of spends.

Our View

These cuts are in line with broader trends in the card rewards market and Indian credit card devaluation trend, where issuers tighten caps when costs mount.

However, what sets this apart is the degree of reduction in key categories for frequent users.

For cardholders who were maximizing rewards via insurance and online spends, the new structure may deliver only a fraction of past benefits unless they alter behavior to stay within tightened caps or stick just to PhonePe-app transactions.