Bank of Baroda Credit Cardholders: Key changes to rewards and processing fees – check here | Mint

In the last few months, many banks have announced changes to their credit card rewards program. Some banks have excluded some categories from earning reward points, while some have started charging a 1% processing fee on some categories. Some banks have gone one step ahead and announced the exclusion of reward points as well as charging a processing fee on specific categories. 

For example, rental transactions are a category where many banks have excluded them from earning reward points and are charging a 1% processing fee.

Bank of Baroda has announced some changes to its credit cards from 1st January 2025. What are these changes, and how will they affect credit cardholders? Let us understand.

Unlimited reward points on UPI transactions without any per statement cycle limit

Earlier, the reward points earned on UPI transactions were capped at 500 reward points per statement. However, from 1st January 2025, the capping will be removed, allowing credit cardholders to earn unlimited reward points on UPI transactions. It is a positive move by the bank and will benefit the credit cardholders who use their cards frequently for UPI transactions.

No reward points on wallet loading transactions

While on the one hand, the removal of reward points capping on UPI transactions is good news, there is bad news for credit cardholders on the wallet loading transactions. Effective 1st January 2025, credit cardholders will not earn any core reward points on wallet loading transactions. The merchant category codes (MCCs) for these transactions include 6539, 6540, 6541, and 6542.

Discontinuation of golf benefits on specified credit cards

The golf benefits on specified Bobcards will be discontinued. These cards include Eterna, Eterna FD, Yoddha, The Sentinel, and Rakshamah.

1% processing fee on wallet loading transactions

In the earlier section, we saw how the wallet loadings will not earn any reward points from 1st January 2025. It does not stop there. The usage of credit cards for wallet loading transactions will attract a 1% processing fee. The MCCs for these transactions include 6539, 6540, 6541, and 6542.

1% processing fee on utility transactions above a specified transaction amount

A utility bill payment transaction of Rs. 50,000 or above will attract a 1% processing fee. The maximum processing fee will be Rs. 3,000 per transaction. The MCC for these transactions will be 4900. Every utility bill of most individual credit cardholders is usually below Rs. 50,000. While paying such bills, cardholders will not incur the 1% processing fee. Very few cardholders will have an individual utility bill of Rs. 50,000 or above, for which they will have to pay the 1% processing fee.

In the past, some credit cardholders have used individual credit cards to pay business/commercial utility bills. These bills can be above Rs. 50,000. Using individual credit cards to pay commercial utility bills or other business expenses is against the terms and conditions of the card. To discourage these credit cardholders, banks have started charging a processing fee for utility bill payments above a specified limit.

If there is doubt about the misuse of the credit card, the bank can ask the cardholder to submit the documents as proof for specified transactions. In the past, some banks have asked individual credit cardholders to submit the documents as proof for specified transactions. The reward points of such customers are suspended till they submit the documents. 

On submission of documents, if the bank is satisfied, the freeze on reward points is removed. If the customer does not submit the documents in a specified time or if the bank is not satisfied with the documents submitted, they forfeit the reward points. In an extreme case, the bank can even cancel the credit card.

1% processing fee on fuel transactions above a specified transaction amount

A fuel transaction of Rs. 10,000 or above will attract a 1% processing fee. The MCCs for these transactions will be 5172, 5541, 5542, and 5983. The 1% processing fee will not be applicable to HPCL Energie Bobcard.

Access to the domestic airport lounge will be based on the minimum eligible spend in the previous quarter

From 1st January 2025, access to domestic airport lounges will be based on a minimum eligible spend in the previous calendar quarter. The calendar quarters will be 1st January to 31st March, 1st April to 30th June, 1st July to 30th September, 1st October to 31st December. For example, the amount spent in the 1st January to 31st March calendar quarter will be counted to unlock the domestic airport lounge access in the 1st April to 30th June calendar quarter.

If you have taken a new credit card, the lounge access minimum spend criteria for the calendar quarter of card issuance will be waived. The above relaxation is applicable only in the case of fresh credit cards issued during the calendar quarter. The relaxation is not applicable for upgrading from one card product to another card product during the calendar quarter.

The minimum eligible spend amount will be either Rs. 20,000 or Rs. 40,000, depending on your credit card variant.

A cardholder can check the quarterly spends in the ‘recent transactions summary’ tab by logging into the credit card portal (www.bobcard.co.in) or the Bobcard Mobile App.

While the domestic airport lounge access is complimentary for the credit cardholder, there is a cost involved for the bank that has issued the credit card. The bank has to pay the airport lounge operator every time its credit cardholder accesses the lounge on a complimentary basis. Hence, most of the banks have linked lounge access to spend-based criteria for most credit cards. The income earned from the specified spends compensates the bank to a certain extent for providing complimentary lounge access to the customer.

The above are the changes announced by Bank of Baroda for its credit cardholders from 1st January 2025. Banks make changes to the features and benefits of credit cards from time to time. Most banks offer higher benefits initially when the card is launched. With time, some benefits are right sized/reduced as the card starts to gain market share. It is done to make the card profitable or improve profitability so that the card benefits can be offered for the long term on a sustainable basis.

Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn.