SBI Credit Card Users Alert! From July 15, Free ₹1 Crore Insurance and Key Benefits to Be Discontinued—Check New Rules

By Siddhi Jain | Jul 13, 2025, 18:30 IST

If you're a holder of an SBI Credit Card, especially one of its premium variants, there's a major policy shift you need to know about. Starting July 15, 2025, State Bank of India (SBI) Card is set to discontinue free air accident insurance coverage up to ₹1 crore for select credit cardholders. Alongside this, several key changes in payment settlement rules and Minimum Amount Due (MAD) calculations will also come into effect.

These changes will impact premium users the most—especially those who rely on SBI’s credit card insurance benefits and flexible repayment terms. Let’s dive into the details of what’s changing and how it may affect you.

✈️ ₹1 Crore Free Air Accident Insurance to Be Withdrawn

Until now, select SBI credit cardholders were entitled to complimentary air accident insurance of up to ₹1 crore. However, this benefit will be discontinued starting July 15, 2025, as part of SBI Card’s latest policy overhaul.

Affected Card Variants:

SBI Card Elite
SBI Card Miles Elite
SBI Card Miles Prime

These cards will no longer provide air accident insurance coverage post the cut-off date. If you’ve been counting on this free insurance during air travel, it’s time to consider alternate personal coverage options.

🛑 ₹50 Lakh Coverage Also Discontinued

Similarly, some cards offering ₹50 lakh air accident insurance with no additional charges will also lose this benefit from July 15.

Impacted Cards Include:

SBI Card Prime
SBI Card Pulse

Users of these cards will need to make new arrangements if they wish to retain any sort of air travel insurance coverage.

💳 New Payment Settlement Hierarchy Implemented

Another major change relates to how SBI adjusts your credit card payments. Previously, the amount you paid would be distributed based on an internal hierarchy. From July 15, SBI will revise the order in which your payment gets applied to different outstanding amounts.

New Payment Allocation Sequence:

GST (100%)
EMI Installments (100%)
All Charges and Fees (100%)
Finance Charges/Interest (100%)
Balance Transfer Amounts
Retail Purchases (Shopping, etc.)
Cash Advances (Last Priority)

This means if you’ve used your card for cash withdrawal, EMIs, and shopping, the bank will now recover taxes, fees, EMIs, and interest first—only then will your payment be adjusted against retail and cash advances. This could impact how quickly your credit balance is restored or how much interest you accrue.

📉 Revised Calculation of Minimum Amount Due (MAD)

SBI is also tightening rules around Minimum Amount Due, i.e., the minimum sum you must pay to avoid default or penalty. The new formula significantly increases the minimum amount by including more components.

New MAD Calculation Includes:

100% GST
100% EMI Amount
100% Charges and Fees
100% Finance Charges
Overlimit Amount (if applicable)
2% of the remaining outstanding balance

This change implies that if you're someone who only pays the minimum due every month to avoid late fees, your MAD will now be higher than before, potentially affecting your monthly budget and increasing overall interest costs if the full amount isn’t paid regularly.

⚠️ Why This Matters to You

These changes will impact a large section of SBI credit cardholders, particularly:

Frequent flyers relying on free travel insurance
Shoppers who use EMI and part-payment features
Users who regularly pay only the minimum due

If you fall into any of these categories, it’s time to re-evaluate your usage strategy and consider shifting to cards offering better terms or getting independent insurance coverage for travel.

✅ What You Can Do

Review your card benefits immediately before July 15.
Adjust your payment habits to avoid high interest due to the new settlement order.
Consider setting up auto-pay for full statement balance to stay penalty-free.
If air travel insurance is essential for you, buy a separate personal cover.
Monitor the MAD on your statements closely to avoid surprises and interest pile-up.