Key takeaways
Card surcharges disappear from 1 October 2026. The RBA estimates Australians could save around $1.6 billion a year.
The cost of processing card payments hasn't disappeared. Banks and card providers may recover it through higher fees or reduced rewards.
Rewards cards could become less rewarding. Watch for lower points earn rates, smaller sign-up bonuses and fewer perks.
Review your credit card before October. Compare the annual fee with the value of benefits you actually use.
Never spend more simply to earn points. If you carry a balance, reducing expensive credit card interest should be the priority.
From 1 October, Australians will notice a welcome change when they tap their card at the checkout.
Merchants will no longer be able to add a surcharge to debit or credit card payments, potentially saving consumers around $1.6 billion a year, according to the Reserve Bank of Australia.
Considering Australians made $475 billion in credit card purchases and another $696 billion in debit card transactions in the 12 months to June 2026, those seemingly insignificant fees add up quickly.
At first glance, removing them looks like a straightforward win for consumers.
But the cost of processing card payments hasn't disappeared. Someone still needs to pay it, and that is where things become more interesting.
Millions of Australians don't know it's coming
Despite the significance of the change, a Finder survey of 1,006 Australians found 43% were unaware of the new rules.
For people using debit cards or basic credit cards, the outcome should be relatively simple: the surcharge disappears.
Rewards and frequent flyer card holders may have a different experience because card fees have long supported rewards programs. With that revenue reduced, banks and card providers may look elsewhere to recover their costs.
"Someone still has to cover the cost of running card payments, and that's now most likely going to be frequent flyer and rewards credit card holders," Finder personal finance specialist Taylor Blackburn says.
That could mean higher annual fees, lower points earn rates, smaller sign-up bonuses or fewer benefits. Finder says some cards are already reducing bonuses, introducing annual fees or increasing existing charges.
Rewards cards are becoming less rewarding
For disciplined users who pay their balance in full every month, rewards cards can still provide genuine value through frequent flyer points, travel credits, insurance and other benefits.
But the calculation changes quickly when fees rise and rewards fall.
A card that costs $300 a year but delivers $700 of benefits may be worthwhile. Increase the fee, reduce the points and remove some benefits, and suddenly the numbers look very different.
Finder found 30% of Australians would cancel their credit card if their provider increased the annual fee in response to the surcharge ban, so banks will need to be careful about how far they push customers.
The more likely outcome may be a gradual reduction in rewards that isn't immediately obvious. As Blackburn warns:
"A card that was a great deal 12 months ago might now come with a higher fee, or a much lower earn rate, for the same spending."
Don't spend money just to earn points
There's another important issue to remember.
Rewards should be a benefit of spending you would have made anyway, rather than an excuse to spend more.
Paying credit card interest to collect frequent flyer points rarely makes financial sense because the interest can quickly overwhelm the value of the rewards.
Similarly, spending unnecessarily simply to reach a bonus-points threshold defeats the purpose.
That's why the October changes are a good opportunity to review your cards. Compare the annual fee with the points, travel credits, insurance and other benefits you actually use rather than assigning value to perks that look attractive but are rarely redeemed.
The bottom line
Removing card surcharges should benefit Australian consumers, particularly now that electronic payments are part of everyday life.
But while an estimated $1.6 billion in visible surcharges may disappear, the underlying cost of processing card transactions remains. Some of that cost will likely emerge elsewhere, and rewards cardholders may feel it through higher fees or less generous benefits.
That doesn't make rewards cards a bad deal. Competitive cards will remain available, particularly for disciplined consumers who pay their balance in full and make good use of the benefits.
It does mean the equation is changing.
The sensible response is to review what you're paying, understand what you're receiving and make sure your card still earns its place in your wallet.
