Australia’s recent credit card shake-up is changing the value of rewards programs. With some banks cutting points and revising benefits, is your annual credit card fee still money well spent?
For years, Australians have happily paid annual credit card fees in exchange for frequent flyer points, gift cards, travel insurance and other rewards. But recent changes mean it’s time to reconsider whether those benefits still justify the expense.
From October 1, 2026, new Reserve Bank of Australia (RBA) regulations reduced the fees banks receive from certain card transactions. While designed to lower payment costs for businesses, the changes are also putting pressure on banks to reconsider their rewards programs.
Are your points worth less?
Some banks have already reduced points earning rates, introduced tighter spending caps or restructured their rewards programs.
This means a credit card that previously offered excellent value might no longer be as rewarding.
Consider a card charging a $250 annual fee. If you previously earned $400 worth of gift cards annually, you were effectively $150 ahead.
However, if reduced rewards bring that value down to $200, you’re now paying $50 more than you’re receiving.
Don’t overlook the extras
For retirees who enjoy travelling, premium credit cards can still provide worthwhile benefits.
Complimentary travel insurance, airport lounge access and travel credits might easily outweigh an annual fee.
However, check the conditions carefully. Travel insurance may have age restrictions, exclusions for pre-existing medical conditions or requirements to purchase your holiday using the card.
Benefits are only valuable if you actually use them.
Beware the interest trap
Even generous rewards aren’t worthwhile if you’re regularly paying interest.
Many rewards cards carry relatively high interest rates, potentially wiping out an entire year’s benefits after just a few months of carrying a balance.
If you don’t repay your balance in full each month, a low-interest or fee-free card could be a better choice.
Time for a credit card health check
Retirement often brings changes to spending habits. If you’re spending less than you once did, you might also be earning fewer rewards.
Review your annual fee, points earning rate, redemption value and any benefits you regularly use.
Compare these against fee-free alternatives, and check whether your bank has announced further changes.
If the numbers don’t stack up, don’t keep paying for a premium credit card simply because it’s always been in your wallet. Loyalty doesn’t necessarily pay.