There is a quiet reset happening in Australian wallets, and most cardholders will only notice it when their points buy less than they used to. The trigger is a package of Reserve Bank reforms taking effect on 1 October 2026, and while the headline changes are aimed squarely at helping merchants, the knock-on effects are reshaping the economics of every rewards credit card in the country.
Two reforms, one big consequence
The RBA is doing two things at once. First, a ban on surcharging means retailers can no longer add a fee when you pay by card — the “1.5% card surcharge” line on receipts is on its way out. Second, the RBA is lowering the cap on interchange fees, the per-transaction amount a merchant’s bank pays to the cardholder’s bank to move a card payment.
For small businesses, this is a real reprieve on the cost of accepting cards. But interchange is not just a cost to merchants — it is the fuel that funds rewards. Every time you earn points, someone is paying for them, and a large share of that money comes from interchange. Cut the interchange banks collect, and you cut the budget that pays for points, lounge passes and travel insurance. The banks are responding exactly as the incentives predict: by trimming the rewards.
What is actually changing, card by card
The cuts are arriving across the market, and they take several forms.
Lower earn rates and points caps
Issuers are throttling how fast you accumulate points. NAB is moving from a “1 to 2 points per dollar” structure to “0.5 to 2 points per dollar, depending on where and how much you spend.” ANZ is capping points once monthly spend passes thresholds in the $25,000 to $50,000 range. Bankwest is introducing tiered caps — for example, 2.5 points per dollar up to $2,000 a month, then dropping to 0.5 points per dollar above that. Virgin Money is cutting a maximum earn rate from 1 point to 0.75 points per dollar.
Higher fees and interest rates
At the same time, the cost of holding these cards is rising. Bank of Melbourne, BankSA and St.George are lifting annual fees by roughly $75 to $80 — one example takes a $175 fee to $250. NAB is converting a $35 monthly fee into a $395 annual fee. Interest rates are creeping up across providers by roughly 1 to 3 percentage points.
Fewer perks and worse redemption
The complimentary extras are thinning out too. ANZ is dropping international and domestic travel insurance on some cards; CBA is scrapping extended warranty cover; Coles is removing purchase protection. And the points you do earn are being quietly devalued at the redemption end. CBA raised the cost of a Myer gift card from 10,950 to 12,500 points — a 14% increase. Westpac lifted the price of a $100 eGift card from 23,500 to 29,412 points, a 25% jump. You are earning slower and burning more.
Why this is a feature, not a bug
It is tempting to read this as banks being opportunistic, and no doubt some trimming goes further than the reforms strictly require. But the underlying logic is sound policy working as intended. For years, generous rewards on premium cards were effectively subsidised by every shopper — including those paying with cash or basic debit — because merchants baked acceptance costs into their prices or passed them on as surcharges. The RBA’s view is that this system quietly transferred wealth from lower-spending consumers to high-spending points collectors, while inflating costs across the economy.
Lower interchange and no surcharging pushes the system toward something cleaner: cheaper, more transparent acceptance for merchants, and rewards programs that survive on their genuine economics rather than on hidden cross-subsidies. That is good for the payments system as a whole. It is simply less fun if you are the cardholder who optimised your life around a points-maximising card.
What cardholders and businesses should do
For cardholders, the message is to run the maths honestly. A rewards card that made sense at a $175 fee and rich earn rates may not survive contact with a $250 fee, halved points and a 25% worse redemption table. Add up what you actually earned last year, apply the new rates, subtract the new fee, and decide whether the card still pays for itself. For many people it will not, and a low-fee or no-frills card will quietly come out ahead.
For merchants, 1 October is unambiguous good news, but it is not a licence to stop paying attention. With surcharging gone, your card acceptance cost is once again fully your cost — which makes least-cost routing, plan reviews and provider negotiations more valuable than ever. The reforms lower the ceiling on what you can be charged; capturing the benefit still takes a look at your own setup.
The rewards golden age was, in part, an accounting illusion funded by fees most people never saw. As those fees fall, the illusion is fading with them. That is a healthier payments system — and a very good reason to check whether the plastic in your wallet still earns its keep.
There is a broader shift underneath the fee tables, too. As premium credit-card rewards lose their shine, expect attention to move toward the rails that were always cheaper to run — eftpos, debit and account-to-account options — and toward loyalty that does not depend on interchange at all, such as merchant-funded offers and cashback tied directly to a retailer. The reforms do not kill loyalty; they push it toward models that stand on their own economics. For a payments audience, that is the more durable trend: the value proposition of a card is being rebuilt around genuine cost, not hidden subsidy, and the programs that survive will be the ones that never relied on the cross-subsidy in the first place.
Got a mate who hoards points? The 1 October reforms are quietly rewriting the value of every rewards card in Australia — send this to the person who needs to re-run the numbers before their card renews. Share this article.