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Kotak Bank regularly updates the features and benefits of its credit cards to provide better services. On June 1, 2025, Kotak Bank will implement several changes to its credit card offerings. This article breaks down the important updates and what they mean for cardholders.
Interest Rate Changes
Kotak Bank has raised the interest rates on most of its credit cards. The monthly interest rate has increased from 3.50% to 3.75%, meaning the annual interest rate now ranges from 42.00% to 45.00%. However, the rates for specific cards like the White Reserve (3.50% per month) and Myntra Kotak Credit Card (3.70% per month) remain the same. It’s important for cardholders to always pay their bills on time to avoid these higher interest charges.
Fees for Returned Payments
If an auto-debit (including NACH and ECS) fails, a 2% fee of the bounce amount will apply, with a minimum charge of Rs. 450. From June 1, 2025, the maximum fee for returned payments will be Rs. 5,000.
Dynamic Currency Conversion Fees
Starting June 1, the dynamic currency conversion fee for the Privy League Signature (paid version), White Reserve, and Kotak Infinite credit cards will be 2%. For all other credit cards, the fee will be 3.50%.
Changes to Reward Points
There will be restrictions on how rewards are earned in certain categories like education payments, utilities, wallet loads, fuel, rent, government institutions, insurance, and online skill-based gaming. The specific restrictions vary depending on the card, but for many cards, rewards will only be earned up to a certain spending limit within each category. For example:
- Privy League Signature Credit Card: No rewards for fuel and rent transactions, but rewards can be earned up to limits for other categories.
- Kotak 811 Credit Card: Rewards for utilities only up to Rs. 35,000 in a statement cycle, with no rewards for other specified categories.
Changes to Cashback Redemption
The cashback redemption value of points will be reduced starting June 1. For example, for the Indian Oil Kotak Credit Card, the redemption value will drop from Rs. 0.25 per point to Rs. 0.20 per point. Similarly, for the Kotak Infinite Credit Card, the value will decrease from Rs. 1 per point to Rs. 0.70 per point.
Milestone Benefits Exclusion
Spending in specific categories like utilities, education, wallet loads, fuel, rent, government institutions, insurance, and online gaming will no longer count toward milestone benefits from June 1. This means that for PVR co-branded credit cards, certain spends like utility payments and rent will no longer help cardholders reach milestone targets for earning movie tickets.
Transaction Fees for Education and Gaming
A 1% transaction fee will apply on education payments made through third-party apps. Similarly, if wallet loading or online skill-based gaming spends exceed Rs. 10,000 per statement cycle, a 1% fee will be charged. These fees will not apply to certain premium cards like the White Reserve, Kotak Infinite, and Myntra Kotak credit cards.
Revised Fuel Surcharge Waiver
Kotak Bank has updated the fuel surcharge waiver thresholds for various credit cards. For example, the Royale Kotak Signature Credit Card will now offer a fuel surcharge waiver on transactions between Rs. 500 and Rs. 5,000, up from Rs. 3,000. The maximum waiver allowed in a card anniversary year will be Rs. 3,500.
Fuel Spending Fees
From June 1, a 1% fee will be applied to cumulative fuel spending exceeding a certain threshold. The threshold varies by card, but for the PVR Gold Credit Card, the fee will apply when spending exceeds Rs. 25,000 in a statement cycle. However, this fee will not apply to premium cards like White Reserve, IndianOil Kotak Credit Card, Kotak Infinite, and Myntra Kotak credit cards.
Why Are These Changes Happening?
Kotak Bank is adjusting its credit card terms to make its rewards program more sustainable and to prevent abuse of the system. These changes are similar to what other banks have been doing, ensuring that the bank can continue to offer profitable rewards while providing fair value to customers.
As a cardholder, it’s important to review these changes and decide whether the updated benefits still align with your spending habits. If you use a Kotak Bank credit card, understanding these changes can help you manage your expenses and rewards more effectively.
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