Credit card rewards devalued with new changes

When it comes to cards and rewards, the landscape is very much a changing one. As interest rates continue to bite, everyone is looking for a bargain here and a chance to save there. That attitude extends to businesses, too. And banks, it seems, have been very active in this area, especially when it comes to credit cards.

According to figures released by financial comparison site RateCity, credit card providers have been ramping up fees since June. RateCity head of research Sally Tindall described some of the increases as the sharpest she’s seen.

In many cases, the target has been cards linked to rewards, meaning a review of your cards might be in order.

How do you know if your credit card is still worth the ‘rewards’?

One of the difficulties in answering that question is the myriad variations in structures between credit card providers. Card A has a higher interest rate than card B, but its fees are lower. But card A has a more attractive rewards system.

It’s a confusing exercise. And it becomes exponentially more so when you broaden the comparison exercise to cards C, D and E. For home loans, the law requires publication of what’s known as a comparison rate alongside its advertised rate. That rate includes the interest rate and most fees and charges, allowing a like-for-like comparison.

But credit card providers as a rule do not provide an equivalent comparison rate, leaving consumers to do their own research.

An article published by RateCity last month gives a clue as to the depth of analysis required. On the day the Commonwealth Bank raised fees and rates on selected cards, it outlined those changes. For the bank’s Awards card, these included:

  • Fees: Increasing from $59 per annum – plus $30 per annum for those on the Qantas program – to $8 per month plus $60 per annum for the Qantas program. Total increase of up to $67 per annum.
  • Points: The removal of the annual cap of up to 50,000 points. However, the value of points halves after the first $2000 spent each month.
  • Cardholder fee: The bank has dropped this fee.
  • Qantas points: No longer available for new customers.

Analysis paralysis

To work out how much better or worse off a customer will be in this case, they will have to factor in all these changes. At first glance, they might think, ‘They’ve doubled the Qantas program fee but slashed the basic fee.’ That is until they realise that the new fee is $8 per month, not per year. So over 12 months, that’s $96, up from $59.

Turning to the rewards points, the credit card holder will need to consider how much they spend each month. Is it more than $2000 a month? If so, how much more? And they’ll have to factor in the bank’s ‘generous’ removal of the monthly fee.

That’s not a simple exercise. And that is for one Commonwealth Bank card. The CBA also has a low-interest card, a low-rate card and an ‘Ultimate Card’. Each comes with its own fee and rate structure.

But of course there is more than one bank in Australia. There’s the ‘Big Four’ and a host of smaller ones, along with many other credit card providers. Each will have a number of cards on offer.

If you were to go through the exercise of comparing them all, chances are any savings you make will be offset by lost time.

The card giveth…

Both customer and provider know that credit cards with rewards attached is a deal of sorts. It should be one that provides mutual benefits. To paraphrase a well-known passage from the Old Testament, “The card giveth and the card taketh away”.

Sometimes, however, the credit card scale of favour tips too heavily one way. As banks and other providers continue to change fees, rates and, perhaps most annoyingly, fee structures, constant review is needed.

With each of those reviews, the butchered bible quote above becomes more a question. “Does the card now taketh away more than it’s worth?” The answer to that question will help you decide if it’s time to switch your credit card provider.

Good luck.

Do you have a credit card with a rewards system attached? Have your fees increased in recent months? Let us know via the comments section below.

Also read: Credit cards are making a comeback. Why?

Andrew Gigacz
Andrew Gigacz
Andrew has developed knowledge of the retirement landscape, including retirement income and government entitlements, as well as issues affecting older Australians moving into or living in retirement. He's an accomplished writer with a passion for health and human stories.


  1. Has it occurred to NONE of you fwits that NONE of these cards/programs/rewards/etc. entanglements are created for the benefit of that customer. Anyone who’d go along/accept ANY of that crap deserves what they get. Idiots all! Want to make a difference? Organise and get the MOST-offending (say) supermarket boycotted. If, say, Woolworth doesn’t get a single customer through the doors for a week or two they’d get the message. It’s like anything else: DO something about an issue or just drop your pants and bend over. (Ever wonder what would happen to ‘mortgage-stress’ if EVERYBODY just refused to pay their mortgage for a few months? OR their ‘taxes’!)

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