Australian Banks Slash Credit Card Rewards Amid Surcharge Ban

Australian banks are set to reduce credit card rewards and benefits starting next month due to changes in interchange fees. The Reserve Bank of Australia's upcoming ban on surcharges aims to alleviate financial pressures on small businesses, saving customers approximately $1.6 billion in extra fees.

Banks will adjust their interchange fees as a result of the surcharge ban, shrinking the funds available for rewards programs. This includes popular offerings like frequent flyer points.

Major banks are making notable changes to their rewards programs. Commonwealth Bank is introducing a new initiative called CommBank Yello, allowing customers to earn points on various products and redeem them with partner brands. However, they will no longer allow customers to earn points through the Qantas Frequent Flyer program.

National Australia Bank (NAB) is reducing the number of points earned per dollar spent with its Qantas Rewards Premium cards, among other changes. ANZ has already adjusted its Frequent Flyer Black and Platinum cards by reducing sign-up bonuses and eliminating certain benefits.

Westpac plans to raise interest rates and annual fees on certain credit cards and modify its insurance offerings.