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The RBA's credit card reform package, while improving security and transparency, has led to significant changes in how banks operate. To offset losses from the lower interchange fee cap, financial institutions are overhauling their credit card offerings. This includes a noticeable reduction in reward programs and the introduction of new fees, prompting experts to advise consumers to carefully review their credit card benefits and consider whether the product still aligns with their needs.
While this is good news for most of us, experts say some credit card holders may be worse off under the reforms. What could I be losing out on?
Banks Reprice Card Perks and Fees
Because the RBA is also lowering the cap on interchange fees (what a store would pay to your bank when you tap your card), it means most banks are looking to recoup lost revenue.perks and points"What we're seeing is a massive clawback of the perks of credit cards and a complete repricing as well," she says. Ms Pedersen-McKinnon says banks have been "quietly slashing" these credit card perks, while increasing some fees, in the lead-up to the October 1 changes.
Ms Pedersen-McKinnon says banks are required to notify customers of any changes they are implementing to credit card products.
"Those emails that you get saying, 'We have made a change to your credit card', you really need to be paying very close attention to," she says. So is having a credit card worth it? Senior financial planner Rebecca Pritchard hopes the changes encourage people to assess whether their credit card is serving them.
Customers Should Review Card Changes
"The earn rate has been changing historically over time and that is going to continue to be a focus, whether it's through direct fees on cards or changing the earn rate for the points system. "
Credit Card Reform RBA Interchange Fees Reward Points Financial Planning
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