Australian Banks Prepare for Surcharge Ban Fallout with Fee Hikes and Loyalty Program Changes

Australia's banks are preparing for a significant hit to their profits as the Reserve Bank of Australia's (RBA) ban on card surcharges approaches on October 1. The regulation aims to reduce costs for consumers across all transactions, but is expected to result in a financial loss of approximately $600 million annually for the banking sector.

To mitigate these losses, banks are implementing fee increases and modifying their loyalty programs. St George Bank, for example, will raise the interest rate on its Amplify Qantas Platinum credit card from 20.99% to 23.99%, while also increasing the annual fee from $75 to $125.

Westpac has announced plans to increase interest rates on certain credit cards and raise their annual fees as well. The National Australia Bank (NAB) will also increase its credit card interest rates by 1.5%. Meanwhile, the Commonwealth Bank is replacing its Commbank Awards program with a new CommBank Yello loyalty and points scheme.

Sally Tindall, director of data insights at Canstar, noted that banks are scrutinizing their credit card rewards programs to recover some of the losses they will incur due to the surcharge ban. She urged consumers to reassess their options and consider the impact of these fee hikes on their financial situation.