Credit Card Lounges: Are They Really Free? A New Audit Reveals Hidden Costs
Mumbai, India – The promise of complimentary lounge access is a major draw for many credit cardholders, but a new analysis reveals that the “free” perk can be surprisingly expensive, often exceeding the cost of the refreshments consumed. financial analyst Parth Parikh, in a detailed report for Money Insights News, lays out a five-minute audit to help consumers determine if their lounge benefits are truly worth the annual fees and hidden foreign exchange markups.
Parikh, who has over a decade of experience in finance and currently heads growth and content strategy at Finsire, recently surrendered his own credit cards after discovering the true cost of lounge access. “When I finally laid my statements side by side, the picture was clear. The lounge photo felt free. The markup paid the bill,” he writes.
The core of Parikh’s analysis centers on a simple calculation: dividing the annual card fee by the actual number of lounge visits over the past twelve months to determine the per-visit cost. He urges cardholders to also factor in a frequently overlooked expense – foreign exchange (forex) markups. On a recent foreign trip, he advises calculating total overseas spend multiplied by the card’s forex rate, then adding 18 percent GST to that fee to reveal the “forex leak.”
“Is per-visit cost plus forex leak higher than what you actually ate or drank in lounges? If yes, the lounge is not free,” Parikh concludes.
Key recommendations from the audit include:
Track Lounge Visits: Accurately count lounge visits over the last year.
calculate Per-Visit Cost: Divide the annual fee by the number of visits.
Account for Forex Leak: Calculate forex markups and GST on foreign spending.
Avoid Fee Waivers as Spending Triggers: Don’t spend extra just to waive fees; consider that extra spend a cost.
Monitor Caps: Be aware of quarterly or yearly limits, as add-on cards share the same pool. pay in Local Currency: Always opt to pay in the local currency when abroad.
Dedicated Cards: Use one card for domestic purchases and another specifically for international travel to easily track markups.
auto-Pay in Full: Avoid late fees, which can negate any earned perks.
* Downgrade or Buy Access: If the cost per visit is high, explore downgrading to a lower-fee card or simply paying for lounge access when needed.
Parikh stresses that while he no longer uses credit cards, he recommends this audit to anyone seeking to maximize value. He acknowledges the analysis relies on publicly available data from fund reports, index history, and disclosures, and explicitly states the article is not investment advice, urging readers to consult a qualified advisor before making financial decisions.