Banks Slash Credit Card Rewards Amid Reserve Bank Rules

The Reserve Bank's new rules on credit card interchange rates are causing banks to cut back on rewards and perks for customers. As of October 1, many credit cards will no longer offer generous sign-up bonuses or high earning rates for ongoing spending.

Banks such as Commonwealth Bank, NAB, Westpac, and Virgin Money are all reducing their rewards programs, with some cuts as deep as 50%. For example, the Commonwealth Bank's Ultimate credit card will earn only 0.8 Velocity points per Australian dollar spent abroad, down from 1.5 points previously.

This means that customers who rely on their credit cards to accumulate frequent flyer points may need to rethink their strategy. However, some banks are bucking the trend, with ANZ continuing to offer one full airline frequent flyer point per dollar spent via its top-shelf cards.