SIDDHARTH's Blog

In the competitive credit card segment to acquire new customers, Bank of Baroda (BOB) had announced a lifetime free credit card offer, if you apply in August (it is a limited period offer according to the bank website). Now, the bank has unexpectedly announced a devaluation in rewards and benefits on Easy, Swavlamban and Select credit cards. The changes are effective from September 15.

“The devaluation of rewards and withdrawing certain benefits are giving a wrong signal to the existing and prospective customers of the bank’s credit card,” says a spokesperson from www.creditcardz.in. He adds that this announcement has come in the short-span of time after announcing good news of a lifetime free credit card offer. With the sudden decision of withdrawal of certain benefits, the customers won’t be able to trust the banks' existing features.

BOB’s Easy and Swavlamban credit cards have a feature of 0.5 percent cashback on repayment of credit card dues. The cashback gets credited in the next month’s statement. The bank has announced the withdrawal of this benefit effectively from September 15 on both credit cards.

When you swipe the credit card for shopping from stores or online, you earn the reward points. After you accumulate a chunk of such reward points, you can redeem them to buy items of your choice. Or you can even use them to pay your card dues.

At present, the redemption value of one reward point is 25 paise. In simple words, one reward point used to earn you items worth 25 paise. Effective from September 15, the redemption value of 1 point has gone down to 20 paise on Easy and Swavlamban credit cards. In case you have accumulated reward points on these credit cards, you can still redeem them before September 15 at the existing rates before they get revised.

One of the main features of BOB’s Select credit card is that it allows you to earn 1,000 bonus reward points on five transactions of more than Rs 1,000 per month. This is in addition to the usual reward points you earn for every transaction. With effect from September 15, the bank has withdrawn this bonus reward point benefit on this card.

A late payment fees is charged by the bank on all credit cards if the minimum amount on the statement is not paid by the due date. The bank has increased the late payment charges for the higher due amount.

For instance, if more than Rs 25,000 is due on your credit card statement, your BOB cards bank charges Rs 950 at present. From September 15, this charge would be Rs 1,100, if you have between Rs 25,001 and Rs 50,000 as dues. If you have more than Rs 50,001 due, then your new late payment penalty will be Rs 1,300.

In case you exceed the credit limit there are bank charges applicable. The charges are 2.5 percent of the amount over and above the sanctioned credit limit or Rs 500, whichever is higher. From September 15, it is being increased to 2.5 percent of the amount over and above the sanctioned credit limit or Rs 600, whichever is higher.