Kotak Credit Card Changes from June 1, 2025

Kotak Mahindra Bank is implementing significant changes to its credit card offerings, including the Kotak UPI RuPay Credit Card, starting 1 June 2025. If you're a Kotak credit cardholder, it's crucial to understand these updates as they could impact your reward earnings, fees, and charges.

Here's a detailed breakdown of the upcoming revisions:

1. Revisions to Reward Points Earnings

The way you earn reward points on certain spending categories is changing, particularly noted for the UPI RuPay Credit Card:

• Utility Spends: Reward points on utility bill payments will now only be earned on the first ₹35,000 spent per statement cycle.
• Discontinued Categories: Earning reward points will be discontinued for spending on:
  • Utility
  • Education
  • Wallet Load
  • Fuel
  • Rent
  • Government
  • Insurance
  • Online Skill-based Activities

2. Changes in Reward Point Redemption

• Cash Redemption Value: The value for redeeming reward points for cash will be revised. Each point will be worth ₹0.10 upon redemption.
• Minimum Redemption: A minimum of 2,000 Reward Points will be required for cash redemption requests.

3. Increase in Finance Charges

• Interest Rate: The finance charges (interest) on outstanding balances and cash advances will increase from the current 3.5% per month to 3.75% per month (which translates to an Annual Percentage Rate of 45%).

4. Introduction of 1% Transaction Fees

A 1% transaction fee (plus applicable taxes) will be levied on spends exceeding certain thresholds in specific categories within a statement cycle:

• Wallet Loads & Fantasy/Skill-Based Gaming: On total spends exceeding ₹10,000.
• Fuel: On total spends exceeding ₹25,000.
• Utility: On total spends exceeding ₹15,000.
• Education: On spends made via third-party applications like PhonePe, Cred, etc.
  • Exemption: Transactions made directly through NEFT/IMPS or via swipe machines at educational institutions will not attract this fee.

5. New Auto-Debit Failure Charge

• If an auto-debit instruction for your credit card payment fails due to insufficient funds, a fee of 2% of the outstanding amount will be charged. This fee will have a minimum charge of ₹450 and a maximum cap of ₹5,000.

6. Revised Cashback redemption value

Kotak Mahindra Bank has announced changes to the cashback redemption value of its credit cards, effective from June 1, 2025. These changes affect multiple Kotak credit cards, with reduced point values and a minimum of 2,000 reward points required for cashback redemption. Below is a breakdown:

These upcoming changes from Kotak Mahindra Bank mark a significant shift in the way their credit cards function, especially the Kotak UPI RuPay Credit Card. With stricter reward eligibility, reduced redemption value, higher finance charges, and new transaction fees, it's more important than ever for cardholders to reassess how they use their Kotak credit cards. If your spending habits heavily involve utilities, fuel, wallet loads, or education, you may want to explore alternative credit cards that offer better value in these categories. Stay informed and make sure your card aligns with your lifestyle and financial goals going forward.

Bonus Blog: If you don't know how to link your RuPay Credit Card with UPI, then click on the link to read about it, and link your Credit Card now.