If you've been quietly racking up Qantas points every time you tap your card at Woolies, I've got some bad news. The surcharge ban that's supposed to save Australians $1.6 billion a year? It's about to gut your rewards card. And the banks aren't waiting around for October 1.
The RBA's card surcharge ban kicks in on 1 October 2026 — no more 1.5% tacked onto your flat white when you tap your phone. Brilliant news for your weekend brunch bill. But here's the knock-on effect nobody was talking about until this week: interchange fees, the behind-the-scenes fees banks charge each other when you use your card, are being slashed from 0.8% down to 0.3% for consumer credit cards. And those interchange fees? They're exactly what fund your frequent flyer points.
Less money flowing through the banking system means less cash to throw at sign-up bonuses, lounge passes, and the points-per-dollar ratios that made rewards cards worth the annual fee. Point Hacks spokesperson Daniel Sciberras told Nine News this week that airlines are likely to sell fewer points to banks, and will start looking to partner with retailers and other consumer brands instead. iFLYflat co-founder Steve Hui was even blunter: "The days of getting good value from collecting points passively is ending."
The banks are already moving. Major players have started quietly scaling back sign-up deals ahead of October. ANZ has wound back its Frequent Flyer offers. And Finder money expert Richard Whitten says the higher-end cards — the ones with $300-plus annual fees earning a point per dollar — will be hit hardest. "You probably will see a certain type of customer decide it's not worth it anymore," he told Nine. "They'll do the numbers for themselves and realise it's not really worth it. They will probably go back to using a cheaper and simpler credit card."
Meanwhile, American Express dropped a quiet bombshell in June. On 5 June they updated their merchant website confirming they'd voluntarily join the surcharge ban from 1 October too. Amex wasn't required to do anything — they operate as both card issuer and payment network, so they sat outside the RBA's regulation. But they're falling in line anyway. No more 2% Amex surcharges at your local cafe. Good for consumers paying at the counter. But for points chasers, Amex was often the last bastion of decent earn rates on everyday spending.
Adding fuel to the fire: new merchant rates kicked in on 1 July. The NOPTA published updated figures showing Visa Credit at 1.21%, Mastercard Credit at 0.87%, and Amex at 1.59%. Those rates already hint at the squeeze — and they're only going to tighten further come October when the full ban and fee cuts land together.
Canstar's Sally Tindall has the simplest test: weigh what you earned in rewards over the past year against what you paid in annual fees and interest. If the scales aren't tipping in your favour — and honestly, they probably won't be by Christmas — it's time to reconsider. Rewards cards only work if you're paying off the balance in full each month. If you're carrying interest, even the biggest points haul won't make up for it.
The average Australian is genuinely better off without surcharges. That $1.50 you used to pay on a $100 dinner? Gone from October. But if you're one of the points-obsessed among us, it might be time to start reading those updated terms and conditions before your bank decides your card isn't worth their while either.
Happy tapping! G