Kotak Credit Card International Transaction Charges

International transaction charges on Kotak Mahindra Bank credit cards apply when you make foreign purchases or use your card for transactions outside India. These fees are levied to cover the costs of processing and converting foreign currency transactions.

International transaction charges on Kotak Mahindra Bank credit cards apply when you make purchases or withdraw funds in foreign currencies. These charges generally consist of two parts: foreign transaction fees and currency conversion fees.

• Foreign Transaction Fee

This fee is levied by Kotak Mahindra Bank and is typically a percentage of the total transaction amount. It is applied to cover the costs of processing foreign purchases.

• Currency Conversion Fee

When a foreign transaction is made, the credit card network (such as Visa or Mastercard) converts the transaction amount from the merchant's local currency to Indian Rupees (INR). This service typically comes with an additional currency conversion fee, which can vary based on the network’s exchange rate policies.

Both of these charges contribute to the overall cost of foreign transactions. The amount you pay can be influenced by the nature of the transaction, such as the country of purchase and the currency involved.

When you use your Kotak Mahindra Bank credit card for international purchases or cash withdrawals, two types of charges are applied: the foreign transaction fee and the currency conversion fee.

• Foreign Transaction Fee

This is a percentage of the total transaction amount and typically ranges from 1.99% to 3.55%. It covers the costs of processing your purchase or withdrawal abroad.

• Currency Conversion Fee

This fee is applied when the credit card network (such as Visa or Mastercard) converts the transaction amount from a foreign currency to Indian Rupees (INR).

For example, if you buy something worth USD 100 (which is about ₹7,500 at an exchange rate of ₹75), and the foreign transaction fee is 3%, then:

• Purchase amount in USD: USD 100
  

• Exchange rate: ₹75 per USD
  

• Converted purchase amount in INR: USD 100 × ₹75 = ₹7,500
  

• Foreign transaction fee (3% of the total amount): ₹7,500 × 3% = ₹225
  

• Total amount owed: ₹7,500 (purchase amount) + ₹225 (foreign transaction fee) = ₹7,725
  

• Currency conversion fee: If applicable, this fee would be added based on the exchange rate and policies of the card network. 

For example, if the conversion fee is 2%, the total amount would increase further:

₹7,725 × 2% = ₹154.5

Total after conversion fee:

₹7,725 + ₹154.5 = ₹7,879.5

While international transaction charges are often unavoidable, there are some ways to reduce or avoid them when you travel abroad.

Research Credit Cards

Before you travel, look for credit cards that charge low or no foreign transaction fees. Some Kotak Mahindra Bank credit cards offer cards with no foreign transaction fees, which can save you money.

Use Cash

If you can, carrying cash in the local currency can help you avoid credit card fees. But be careful when carrying cash, as it can be risky. Make sure to use a safe method, like a money belt or secure wallet.

Use Prepaid Cards

You can also use prepaid travel cards. These cards let you load foreign currency in advance and use them like a debit card while abroad. Many prepaid cards offer good exchange rates without the extra fees that come with credit cards.

When you use your Kotak Mahindra Bank credit card for international transactions, the purchase made in a foreign currency needs to be converted into Indian Rupees (INR). This process is known as currency conversion, and it is handled by the credit card network, such as Visa or Mastercard, in partnership with Kotak Mahindra Bank.

How Kotak Mahindra Bank Converts Foreign Currency

Kotak Mahindra Bank relies on the exchange rates set by the credit card network (Visa or Mastercard) at the time of the transaction. The exchange rate is usually based on the market rate at that moment, but the network may also apply a margin for profit.

• Transaction in Foreign Currency

When you make a purchase abroad, you are billed in the merchant's local currency (e.g., USD, EUR).

• Currency Conversion

The credit card network (Visa or Mastercard) then converts this amount into INR using their exchange rate, which can fluctuate due to market conditions.

• Additional Conversion Fee

In addition to the exchange rate, a currency conversion fee may be charged by the credit card network. This fee is typically 1% to 2% of the transaction amount and is added to the final cost.

Kotak Mahindra Bank's Exchange Rate Policies

While the exchange rate is determined by the credit card network, Kotak Mahindra Bank may apply additional policies or charges. The bank generally adheres to the exchange rates provided by Visa or Mastercard, but these rates are not always the same as the rates you see in the market or on currency conversion websites. The final exchange rate used for your transaction will depend on the rate at the time of processing.

• Fluctuating Rates

The exchange rate may vary from the time you make the purchase to when the transaction is processed, depending on the credit card network’s policies and the market rate at that time.

• Markups

Some networks may apply a markup over the market rate as part of the exchange process, which can affect the total cost of your transaction.

Activating your Kotak Mahindra Bank credit card for international transactions is a simple process. Follow these steps to enable global usage:

1. Log in to the Kotak Mobile Banking app on your phone
   

2. Navigate to the "Service Request" menu
   

3. Select "Credit Card Service Requests", then go to "Card Controls"
   

4. Enable international transaction options, such as ATM, POS, e-commerce, and online transactions
   

5. Confirm your selection to activate international usage on your credit card

Once activated, your Kotak credit card will be ready for international transactions, allowing you to make purchases and payments abroad, including ATM withdrawals and online shopping.

The processing time for international transfers using Kotak Mahindra credit cards can vary depending on the type of transaction:

• International Purchases

These transactions are generally authorised instantly at the point of sale or ATM

• Funds Transfers or Remittances

The exact time depends on factors such as the currency being transferred and the destination country

Please note that while purchases abroad are processed quickly, international remittances may require additional processing time.

When you use your Kotak Mahindra Bank credit card for international transactions, certain foreign exchange-related fees may apply. These charges can vary depending on the card category.

• Foreign Currency Markup Fee
  

  • Generally 3.50% of the transaction amount
    

  • For some premium card variants, this fee is 2%
    

  • In select cases, this charge may be waived as part of specific card benefits
    

• Dynamic Currency Conversion (DCC) Fee
  

  • Usually 3.50% of the transaction amount
    

  • From 1st June 2025, this fee will be 2% for certain premium card variants
    

  • This charge applies to transactions made in Indian Rupees (INR) at international locations or to INR transactions with merchants registered outside India
    

  • In some cases, this fee may also be waived depending on the card type
    

• Currency Conversion Fee

A currency conversion fee may apply when transactions made in a foreign currency are converted into Indian Rupees (INR). This fee is determined by the card network, such as Visa or Mastercard, based on their prevailing exchange rate policies.