Banks keep reviewing their credit card features and benefits from time to time. Kotak Bank has announced a number of changes to its credit cards. The changes will be effective 1st June 2025. In this article, we will understand all the details of these changes.
Increase in interest charges
The interest charges on most credit cards have been increased from 3.50% to 3.75% per month. It translates into an increase from 42.00% to 45.00% per annum. The interest rate on some credit cards like White Reserve (3.50% per month) and Myntra Kotak Credit Card (3.70% per month) has been left unchanged.
It is recommended that a credit cardholder must always pay the monthly bill before or by the due date to avoid the hefty interest charges.
Fee on standard instruction failure
If the standing instruction fails or the auto-debit (includes NACH and ECS) is returned, a fee of 2% of the bounce amount is applicable. The minimum fee is Rs. 450. From 1st June, the maximum fee applicable will be Rs. 5,000.
Dynamic currency conversion fee
From 1st June, the dynamic currency conversion fee will be 2% for Privy League Signature (paid version), White Reserve, and Kotak Infinite credit cards. The dynamic currency conversion fee will be 3.50% for all other credit cards.
Rewards earning restriction in specified categories
From 1st June, there will be restrictions on rewards accrual on transactions in specified categories. The specified categories include education payments, utilities, wallet load, fuel, rent, Government institutions, insurance, and online skill-based gaming.
The restrictions will differ from card to card. For some cards, the cumulative spends on each specified category will earn rewards only up to a specified amount in a statement cycle. For some cards, the spends in specified categories will not earn any rewards.
For example, for the Privy League Signature Credit Card, there will be no rewards for transactions on fuel and rent. For other categories, the rewards will accrue for cumulative spends up to a specified limit in a statement cycle. For rewards accrual, the cumulative spend limit in a statement cycle for various categories is as follows: Utilities (Rs. 75,000), education (Rs. 1,00,000), wallet load (Rs. 10,000), Government institutions (Rs. 75,000), insurance (Rs. 1,00,000), online skill-based gaming (Rs. 15,000).
For the Kotak 811 Credit Card, the rewards will accrue on utilities for cumulative spends of up to Rs. 35,000 in a statement cycle. There will be no rewards on the other categories specified above.
For details of reward accrual restrictions on other credit cards, refer to the Kotak Bank website.
Revision in cashback redemption value
The cashback redemption value of points has been revised downwards. For example, the current cashback redemption value of an Indian Oil Kotak Credit Card reward point is Rs. 0.25 per point. From 1st June, the cashback redemption value will be revised down to Rs. 0.20 per point.
Similarly, for the Kotak Infinite Credit Card, the cashback redemption value has been revised down from Rs. 1 per point to Rs. 0.70 per point. To check the revision in redemption value of reward points for other credit cards, refer to the Kotak Bank website.
Exclusion of spends on specified categories for calculation of milestones
From 1st June, the spends in the following categories will not be considered for calculating milestone benefits: utility, education, wallet load, fuel, rent, government, insurance, and online skill-based gaming.
For PVR co-branded credit cards, Kotak Bank awards PVR tickets to the cardholder on achieving specified spends within a specified time. From 1st June, spends on the following categories will not be considered while calculating spends for awarding movie tickets:
- For PVR Kotak Gold and PVR Kotak Platinum Credit Cards: Spends on utility, education, wallet loads, rent payments, and online gaming.
- For PVR INOX Kotak Credit Cards: Spends on rent payments, wallet loads, and online gaming.
1% fee on transactions in specified categories
A 1% transaction fee will be applicable on all education payments made through third-party apps. It implies that if the payment is made directly to the education provider using their website or POS, the 1% fee will not apply.
There will be a 1% fee on cumulative wallet loading spends exceeding Rs. 10,000 per statement cycle. The cumulative online skill-based gaming spends exceeding Rs. 10,000 per statement cycle will attract a 1% fee.
The above fee on education payments, wallet loading and online skill-based gaming spends will not apply to White Reserve, Kotak Infinite, Kotak Signature, and Myntra Kotak credit cards.
Fee on utility spends
A 1% fee will be on cumulative utility spending exceeding a threshold per statement cycle. The threshold will differ from card to card. For example, for the PVR Gold Credit Card, the fee will apply when the cumulative utility spends exceed Rs. 35,000 in a statement cycle.
Similarly, for the Royale Kotak Signature Credit Card, the threshold is Rs. 50,000 per statement cycle, and for the White Signature Credit Card, the threshold is Rs. 75,000 per statement cycle.
The above fee will not apply to White Reserve, Kotak Infinite, Kotak Signature, and Myntra Kotak credit cards.
Threshold for fuel surcharge waiver
The threshold for the fuel surcharge waiver has been revised for various credit cards. For example, earlier, for the Royale Kotak Signature, the fuel surcharge waiver applied for fuel transactions between Rs. 500 and Rs. 3,000. From 1st June, the fuel surcharge waiver will apply for fuel transactions between Rs. 500 to Rs. 5,000. The maximum waiver applicable in a card anniversary year is Rs. 3,500.
Similarly, the fuel surcharge waiver threshold has been revised for other credit cards. For details, refer to the Kotak Bank website.
Fee on fuel transactions
A 1% fee will be on cumulative fuel spending exceeding a threshold per statement cycle. The threshold will differ from card to card. For example, for the PVR Gold Credit Card, the fee will apply when the cumulative fuel spends exceed Rs. 25,000 in a statement cycle.
Similarly, for the Royale Kotak Signature Credit Card, the threshold is Rs. 35,000 per statement cycle, and for the White Signature Credit Card, the threshold is Rs. 50,000 per statement cycle.
The above fee will not apply to White Reserve, IndianOil Kotak Credit Card, Kotak Infinite, Kotak Signature, and Myntra Kotak credit cards.
Should you continue using your credit card after these changes?
As mentioned earlier, banks keep revising their credit card program features and benefits from time to time. The restrictions on earning rewards, the exclusion for calculation of milestones, and the introduction of a 1% fee for spends in specified categories are steps that most banks have taken. Kotak Bank has also joined other banks in taking this step.
It has been done to make the rewards program sustainable so that the bank can continue offering it in a profitable manner on a long-term basis. The measures will also stop some bad actors from exploiting the rewards program. Depending on your Kotak Bank credit card and the changes applicable to it, you need to reevaluate the value proposition to decide whether you should continue using it.
Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn.
