Who’s Really Paying For Your ‘Free’ Food- Are There Hidden Charges On Your Credit Cards? News24 –

Free access to airport lounges is a perk that many travellers highly value when choosing a credit card. Airport lounges offer a comfortable space where passengers can unwind, enjoy meals, catch up on work, or even take a short nap before their flight. And the best part is, it will cost us just one or two rupees or even nothing. But have you ever wondered how the bank is able to provide these services at such a minimal cost? Where does the lounge get the money to offer the services we enjoy? Are there any hidden charges associated with our credit or debit cards that we might not be aware of, and we are paying for them without knowing? Read below to know who exactly pays the fees..

There are no hidden charges. Data analyst Suraj Kumar Talreja explains this to The Economic Times. According to him, the lounge access provider is still making a decent profit even when consumers aren’t paying. Talreja believes that, an airport lounge is nothing more than a private space inside the airport where travelers can relax, eat, work, or sleep before their flight. He said to the publication that most people who enter lounges in India today don’t actually pay anything out of pocket. “You swipe your credit or debit card, and walk in. It feels free. But behind the scenes, someone is paying. And it’s not the lounge, or you. So, who’s covering the cost?” He said.

Who Pays The Lounge Fees?

Talreja explains that the lounge fee is paid by the bank or the card network, like Visa, MasterCard, or American Express. Every time someone uses a lounge with cards from HDFC, Axis, SBI, ICICI, or Rupay, the lounge gets money from the bank. This is part of the credit card benefits meant to make customers happy and attract new ones.

Lounge – A Business Model

Lounges offer many facilities, such as buffet food, drinks, Wi-Fi, charging points, newspapers, and comfortable seating. Some lounges even have showers, spas, and sleeping areas. Talreja points out that lounge access is no longer just a luxury. It’s a business model where banks pay for the experience, and passengers enjoy it.

How Much Do Banks Pay Airport Lounge Operators?

Banks pay for every lounge visit. In India, the cost for a domestic lounge visit is usually between Rs 600 and Rs 1,200. For international lounges, it can be $25 to $35 (about Rs 2,000 to Rs 3,000), paid through networks like Priority Pass or LoungeKey. So, when a cardholder spends half an hour in a lounge having a sandwich and coffee, the bank is covering the cost. Talreja says: “That means each time you sit for 30 minutes and eat a sandwich + coffee, your bank is paying the bill. And yes, lounges LOVE frequent flyers.”

There are four ways to access a lounge. The most common is through credit or debit cards. Other ways include international networks like Priority Pass, LoungeKey, or Dreamfolks, buying a day pass (Rs 1,500 to Rs 3,000), or having a business class ticket or special airline status.

Talreja Explains How The Business Model Works

• Lounges get paid for every visit
• They get many customers through credit card users
• They save money by working with caterers and airports
• Some lounges sell day passes, but that’s a small part of their business
• Their profit per visit isn’t huge, but high customer volume makes up for it

Banks benefit too. Lounge access is a way to attract and keep customers. People love “free lounge access” because it makes them feel premium, even if the card has no annual fee. It encourages customers to use their cards more and increases the chance they will upgrade to a premium card later. It’s a mix of psychology and economics.

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