Australia’s Big Banks Hike Credit Card Fees Before October 1 Surcharge Ban

Australia’s biggest banks are rolling out fee hikes and slashing loyalty rewards to cushion the impact of the Reserve Bank’s October 1 surcharge ban. Commonwealth Bank, Westpac, St.George, and NAB are all raising credit card interest rates, annual fees, and reducing points programs. The surcharge ban will eliminate a key revenue stream as interchange fees drop, forcing banks to claw back money directly from cardholders.

What the surcharge ban means for banks

From October 1, 2026, Australian businesses can no longer add surcharges to debit and credit card payments. The Reserve Bank estimates this will cost banks about A$600 million per year. Interchange fees, which businesses pay to banks for card processing, will also fall. Banks have no choice but to pass the pain to customers through higher fees and lower rewards.

Fee hikes and rate increases announced

Westpac is raising purchase rates from 20.99% to 23.99% on some cards from 30 September 2026. St.George lifted its Amplify Qantas Platinum card rate from 20.99% to 23.99% and annual fee from A$75 to A$125, while cutting the interest-free period by 10 days. NAB is hiking credit card interest rates by 1.5%. Commonwealth Bank has overhauled its rewards program entirely, replacing the old Commbank Awards with a new Yello loyalty scheme.

Rewards programs slashed or restructured

Westpac’s Altitude Rewards program fee is jumping from A$0 to A$75 for Platinum and Black cards. Gift card redemptions are becoming more expensive, with a A$100 eGift card now costing 29,412 Altitude Points instead of 23,500. Points per dollar spent are also falling in some categories. Sally Tindall, Canstar director of data insights, said banks are desperate to protect profit margins after the surcharge ban strips away revenue.

What cardholders should do

Consumers should evaluate whether their credit card rewards justify the higher fees and interest rates. Tindall advised adding up annual fees, interest charges, and currency conversion costs to weigh against points earned. Switching to cards with lower fees or using alternative payment methods like PayID or PayTo may save money, especially for larger purchases.

Final Thoughts

With the surcharge ban cutting A$600 million in annual bank revenue, Australian cardholders face a stark choice: pay higher fees for rewards that are now worth less, or switch cards and payment methods. The data shows banks are choosing to raise prices rather than absorb losses.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.