Kotak Mahindra Bank is making substantial updates to its credit card offerings, which will take effect from June 1, 2025. The changes primarily target the reward structure, spending limits, and additional fees for several cards across the bank’s portfolio. The updates aim to streamline the rewards process and set clear boundaries for spending categories that will still be eligible for rewards and cashback. Let’s explore the significant aspects of these changes.

Changes to Reward Categories and Spending Limits

Under the new policy, Kotak Mahindra Bank will impose revised spending limits on various categories such as utility payments, education fees, wallet loading, fuel, rent, government spends, insurance premiums, and online gaming. Once users cross a specific spend threshold, they will no longer receive rewards or cashback. This is expected to impact high-spending cardholders who frequent these categories for transactions.

For instance, the Kotak Privy League Signature card will exclude reward earnings for the following:

• Utility spends above ₹75,000 per billing cycle

• Education spends above ₹1 lakh

• Wallet loads exceeding ₹10,000

• Government-related payments above ₹75,000

• Insurance premiums exceeding ₹1 lakh

• Online gaming spends above ₹15,000

Moreover, fuel and rent payments will no longer accumulate rewards under the new changes.

Other Kotak credit cards, including Mojo Platinum, Zen Signature, and Kotak 811, will also face similar restrictions, though their thresholds will be comparatively lower. Additionally, cards like Delight, Fortune, and 6E Rewards will exclude these categories from earning rewards altogether.

Reduced Reward Point Redemption

As part of these updates, the value of reward point redemption will decrease for various cards. This will particularly affect cardholders looking to redeem accumulated points for merchandise or other benefits. The reduced values are as follows:

• Kotak Royale, League, and Urbane cards will see redemption values fall from ₹0.10 to ₹0.07 per point.

• For Kotak 811 Credit Card, the redemption value drops from ₹0.25 to ₹0.10 per point.

• Kotak Infinite and NRI Royale Signature cards will see a reduction from ₹1 to ₹0.70 per point.

The overall value change will mean that users will need more reward points to get the same value when redeeming them for items, travel, or cashback.

Introduction of a 1% Transaction Fee

One of the more significant changes is the introduction of a 1% transaction fee on select categories once the spending limit is crossed. This fee will apply to:

• Rent and education payments (regardless of the amount)

• Utility bills, wallet loads, online gaming, and fuel once spending exceeds specific limits.

For example, for Kotak Privy League Signature cardholders, utility spends beyond ₹75,000 and fuel purchases above ₹50,000 will attract the new fee. For Kotak 811, the fee will apply after spending more than ₹35,000 on utilities and ₹25,000 on fuel in a billing cycle. Additionally, wallet loading and online gaming transactions above ₹10,000 will also trigger the fee.

Revised Fuel Surcharge Waiver and Increased Transaction Caps

Fuel transactions, which are commonly part of daily spending for many users, will see changes in surcharge waivers. Kotak White Reserve, Infinite, and Privy League Signature cards will now have a new cap of ₹7,500 per transaction to qualify for surcharge waivers. Additionally, for Kotak White Credit Cards, the annual cap for fuel surcharge waivers has been raised from ₹3,500 to ₹4,500. Other Kotak cards will see similar increases in their fuel surcharge waiver thresholds.

Changes to Finance Charges and Other Fees

In line with these updates, Kotak Mahindra Bank has also revised the finance charges on many of its credit cards. The monthly rate will increase from 3.50% to 3.75% per month, which translates into an annual rate of 45%. Kotak Privy League Signature, previously at 2.49% p.m., will now have its rate increased to 3.50% p.m. The new rates apply to several other cards, including Kotak Infinite and White Signature, which will also see their rates raised to 3.50%.

Other notable fee changes include:

• Standing instruction failure fee: Increased to 2% of the amount, with a minimum fee of ₹450 and a maximum of ₹5,000.

• Minimum payment due: The amount due will now be 1% of total outstanding or 100% of EMIs and other charges, with a minimum of ₹100.

• Dynamic currency conversion fee: The fee for White Reserve, Infinite, and Privy League Signature cards will be 2%, while all other cards will have a 5% fee.

Final Thoughts on Kotak Mahindra Bank’s Credit Card Updates

These changes by Kotak Mahindra Bank are designed to curb excessive spending in certain categories and introduce more control over the rewards and redemption structure. The reduced rewards, increased fees, and transaction limits will likely prompt cardholders to reassess their spending habits and card choices. While these adjustments may provide clearer spending boundaries for some, others may find them restrictive.

In any case, Kotak Mahindra Bank’s customers will need to closely monitor their spending patterns after June 1, 2025, to ensure they make the most of their credit card benefits and avoid unnecessary fees.

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