RBA Cracks Down on Credit Card Surcharges in October

Australians have become accustomed to paying credit card surcharges on purchases, but recent changes are set to simplify this process. As of October 1, the Reserve Bank of Australia will ban surcharges on credit cards and debit cards, aiming to reduce complexity and confusion for consumers.

The current system allows businesses to charge a sliding scale fee based on a percentage of the overall purchase price at checkout, ranging from 0.2% to 10%. This has resulted in a $1.6 billion annual cost for Australians.

Changes will include capping credit card surcharge fees at 0.3%, debit cards at 0.16%, and foreign-issued cards like American Express at 1%. This move is expected to make accruing debt via rewards cards less attractive by cutting points earning by as much as 50%.