Just when you thought the surcharge ban couldn't reach any further, it's landed in your frequent flyer account. This week Qantas and Virgin Australia went back to the banks to renegotiate the deals that fund your points — and it turns out the whole points economy runs on the very fee the RBA is about to axe.

What's happening?

From 1 October, card surcharges disappear AND the interchange cap on consumer credit cards drops from 0.80 per cent to 0.30 per cent — roughly $910 million a year out of bank fee revenue. Interchange is what pays for your points: banks buy them wholesale from the airlines, and Qantas clips the ticket on more than a third of all credit card transactions in Australia.

Kill the fee and the banks stop buying. So, as PayDay News reports, both airlines have renegotiated their bank agreements for Qantas Frequent Flyer and Velocity — pivoting to “direct earn” and pushing customers onto payment platforms. Virgin has flagged a three-year Velocity overhaul, and the headline says it all: loyalty profits are going to slow.

The numbers are already moving

NAB is first out of the gates with the hard numbers. From 1 October, transferring points to Velocity gets a third more expensive: 2 NAB Rewards points for 1 Velocity point becomes 3 for 1. Earn rates on its Signature card are being trimmed, and fees across its rewards range are climbing. Westpac's also shaking up card perks from 1 October — it says the timing's a coincidence, but that's a big coincidence.

Velocity saw this coming: its CommBank deal — nine million Yello customers earning Velocity Points on home loans, savings and insurance — was, in CEO Andrew Cleary's words, “the first of a number of enhancements” moving earning beyond the card. Qantas went earlier and bigger — its February loyalty overhaul retired Points Club and started steering status credits toward everyday ground spending instead of bank-funded cards.

What it means for your balance

Your points are being repriced, and not in your favour. Holding NAB Rewards points? Convert them before 30 September to lock in the old 2:1 rate — after that, the haircut applies. Beyond NAB, expect lower earn rates, higher card fees and tighter reward charts as both programs absorb the hit.

The surcharge on your brunch is finally disappearing. The cost is just turning up somewhere else. And yes, 1 October is now 27 days away.

We flagged the points squeeze back in July — and it's playing out exactly as advertised. The game isn't over. It's just changed lanes.

Happy flying — while the points are still worth something! G