Credit Card Surcharge Ban 2026: Rewards Points Are Shrinking

If you’ve received an email from your bank announcing “exciting improvements” to your rewards program, we have some news. That email was doing a lot of heavy lifting.

Most of the major banks are reducing what your credit card points are worth, and the timing is not a coincidence. It lines up almost exactly with the Reserve Bank’s credit card surcharge ban, which lands on 1 October 2026.

The Good News: The Credit Card Surcharge Ban

From 1 October, that annoying surcharge at the checkout disappears.

The Reserve Bank has removed surcharging across the eftpos, Mastercard and Visa networks, covering debit, prepaid and credit cards. American Express has voluntarily come along for the ride. No more 1.5% for tapping your card at the café, and no more mental arithmetic at the servo.

The RBA reckons the card surcharge ban will save Australians around $1.6 billion a year. Businesses get a hand too: the caps on interchange fees they pay drop on the same day, with interchange on consumer credit cards falling from 0.8% to 0.3%.

Why Credit Card Rewards Are Changing in 2026

Money doesn’t vanish – it relocates.

Lower interchange fees mean the banks that issue your credit card collect less on every transaction. Reporting suggests around $600 million a year of bank income is about to go missing, and banks are not renowned for shrugging that off.

So, the rewards programs, which were always funded by those merchant fees in the first place, are getting trimmed. Fewer points per dollar. New or higher credit card annual fees. Tighter earn caps.

The Commonwealth Bank’s Qantas arrangement is a good example: fewer Qantas points per dollar spent, plus an annual fee of $149 to stay in the program. That’s on top of Qantas separately increasing the number of points you need for flights and upgrades.

Are Credit Card Rewards Still Worth it?

Australians currently owe around $19 billion on credit cards, and more than a third of cardholders don’t clear their balance in full each month. Once you’re carrying a balance, rewards points are financial theatre. A card charging 20% interest is taking far more from you than any points program is giving back.

Credit card rewards only make sense for people who pay the card off in full, every month, without exception. If that’s you, brilliant. Play the game, chase the points, enjoy the lounge.

If it’s not you, October is a good time to reassess. The surcharge that used to nudge you toward debit is going away, which removes one of the small frictions that kept card spending in check. That’s fine if your spending is deliberate. It’s not fine if your credit card is doing your budgeting for you.

Four Things To Do Before 1 October

1. Read the email. Look for the earn rate, the annual fee and the earn cap. If the fee now exceeds the value of the points you realistically earn in a year, the card is costing you money.

2. Do the maths on your balance. If you’re carrying credit card debt, run the numbers through our credit card repayment calculator. Seeing the interest total written down is usually all the motivation anyone needs.

3. Watch prices in the September–November window. Businesses absorbing card payment costs will adjust their sticker prices once the surcharge ban starts. Some already have. It’s not price gouging, it’s arithmetic, but it’s worth noticing where your regular spending ticks up.

4. Check the card is still earning its keep. A no-frills, low-rate card beats a premium rewards card for most people. Points are a bonus, not a strategy.

The Bigger Picture

None of this is a total crisis. The surcharge ban is a nudge, and a useful reminder that the “free” stuff in banking is never free, it’s just billed somewhere you weren’t looking.

The households who’ll come out ahead in October are the ones who already know where their money goes. Our cashflow and budgeting and debt management services exist for exactly this. And if you’re curious about why points programs are so effective at keeping us loyal to a card we’d otherwise ditch, behavioural finance is a genuinely fascinating rabbit hole.

Let’s Make Life Easier.

Not sure whether your card, your cashflow or your whole setup is working as hard as it should be? That’s a very good question to bring to the table.

Book a chat with the HPartners team – financial advice without judgement, and absolutely no points required.