If you are a Kotak Mahindra credit card user, the transactions you make may sooner cost you more than what you actually think. The bank has revised several transaction-related charges recently. It includes international spendings, EMI conversions and cash advances. These changes can directly affect how the value you get out of your card.
Understanding these updates is not just about being informed. It is about protecting your money from unnecessary fees and charges. Clarity and understanding which fees apply in which scenarios and ways to avoid them can help you make smarter decisions and preserve the actual benefits of the credit card like the rewards, cashback offers and convenience. Learn what has changed, how it affects you and the other smarter ways to avoid the extra charges in this article. Keep reading.
Summary of Key Changes
- Increased International Transaction Fee: The forex markup fee has been revised from 3.5% to 4% for all the international transactions. This change increases the cost involved in using the card abroad or for foreign currency and related online transactions.
- Revised EMI Conversion Processing Fee: The processing fee of INR 199 + GST is now applicable as fees for converting purchases into EMIs. Earlier, this was either at the option of waiver or is set at a lower fee.
Updated Balance Transfer Charges: The balance transfers are now charged a processing fee of 1.5% or at INR 199 whichever is higher. Earlier, there was a limited-time zero-fee for offering cards as a part of its promotion. - Reinforced Cash Advance Charges: Cash withdrawal charges are as same as 2.5% or INR 500 whichever is higher. However, the bank has urged stricter enforcement of interest from the 1st day.
- Effective Date: These revisions are about to come into effect from July 1, 2025 and the same applies across almost all of the Kotak Mahindra credit cards.
- The current updates are reflecting a 5% – 20% increase in the charges across the categories which brings Kotak in line with the fees increase that are announced by the other major banks recently.
Transaction Categories Affected
Domestic Transactions:
- Cash advance fees remain at 2.5% of the amount withdrawn or INR 500 whichever is higher that are currently emphasized with more stricter usage terms.
- Fuel Surcharge of 1% remains applicable on every fuel spend. The current rule applicable is limited or no option to waive depending up on the type of the card.
- Utility bill payments are subject to convenience fee or processing charges particularly for the third party billers and platforms.
International Transactions:
- The forex markups are revised from 3.5% to 4% in case of foreign currency transactions including the online spendings of NRI currency.
- The Dynamic Currency Conversion (DCC) is discouraged for the reason, double charging risks. The users may face higher overall transaction fees or costs
EMI Conversions:
- A new rule of processing fee chargeable for conversion of purchases into EMI at a fee of INR 199 + GST.
- Varied rate of interest for EMI ranges from 13% to 18% based on the EMI tenure and the transaction type.
Other Charges
- Late payment fee of INR 1,200 is applicable on every outstanding amount.
- 2.5% of the over-limit amount of INR 500 at minimum (whichever is higher) is charged as over-limit fee.
- INR 100 – INR 199 depending on the card variant is charged as card replacement fee.
Also read: 3 Credit Cards Every Online Shopper Needs for Amazon & Flipkart Deals
Comparison with Other Banks
| Fee Category | Kotak Mahindra | ICICI Bank | HDFC Bank | SBI Card | Verdict |
| Forex Markup Fee | 4% | 3.5% (Amazon Pay: 3.5%) | 3.5% | 3.5% | More aggressive |
| EMI Processing Fee | INR 199 + GST | INR 199 + GST | INR 199 + GST | INR 199 + GST | In line |
| Cash Advance Fee | 2.5% or INR 500 | 2.5% or INR 500 | 2.5% or INR 500 | 2.5% or INR 500 | Standard |
| Over-limit charges | 2.5% or INR 500 | 2.5% or INR 500 | 2.5% or INR 550 | 2.5% or INR 600 | Slightly lenient |
| Late Payment Fee | Up to INR 1,200 | INR 100 – 1,200 | INR 100 – 1,300 | INR 400 – 1,300 | In line |
| Card Replacement Fee | INR 100-199 | INR 100 | INR 100 | INR 100 | standard |
Tips for Users to Minimize Charges
- Use digital wallets by linking your Kotak credit card to wallets like PhonePe, Paytm or Google Pay to avoid certain convenience fees or gateway fees.
- Enable auto-debit or make full bill payment on time before the due date to avoid the late payment fees and other interests and charges.
- Limit the international usage by opting for lower forex fee cards or choose the debit cards from different banks that charge less fee while making international transactions as Kotak charges a forex markup fee of 4%.
- EMI conversion includes a processing fee of INR 199. A smarter move can be to use it for high-ticket purchases and transactions to outweigh the extra cost.
- Convert the accumulated reward points to avail vouchers instead of relying on EMI conversion options to cut down additional costs.
- Always look for hidden costs or unnoticed charges to avoid the fee traps and related disputes and concerns.
Conclusion
Staying informed about the terms and conditions that are updated every now and then of your credit card is something mandatory. Kotak Mahindra’s revised transactions fees may seem minor at the first go, however, over time these charges can impact significantly reducing the value you get out of your credit card. Make it a habit to read the monthly statements to tract your transaction patterns to official communications from the banks to stay updated. If the updated charges are not aligning with your usage, explore other credit cards that offer better alternative solutions that suit your spending habits and goals. Smart financial decisions always start from awareness.
Written by Kavitha Sugumar
