CBA Readies for RBA Tuesday: Rewards Overhaul Amid Cash Rate Expectations

The Commonwealth Bank of Australia (ASX:CBA) is gearing up for a busy week ahead, as its revamped rewards credit card settings take effect on Tuesday. The changes come just before the Reserve Bank of Australia's (RBA) ban on card surcharges, which starts on Wednesday. This timing puts pressure on bank margins and credit quality, as the RBA is widely expected to deliver another cash rate rise on the same day.

The bank has overhauled its rewards program, shifting from a points-based system to one that rewards customers for using multiple CommBank products. Cardmembers who qualify will have their points moved across automatically, but eligibility is tied to also using a CommBank transaction account and making regular purchases on it. Earn rates will scale with the number of products a customer has with the group.

The changes aim to protect card economics as interchange income shrinks, while nudging customers toward using the bank as their main everyday account. The stock has trailed the broader market over the past half-year after a long run of outperformance, and investors will be watching how the bank absorbs these crosscurrents.