So much for the ‘rewards’: Credit card fees rise by up to 200 per cent

Credit card providers have been increasing the fees they charge cardholders over the past three months, with some increasing their fees significantly.

RateCity has identified seven lenders with 22 credit cards in which fees have increased since the start of June.

The vast majority of the increases are for rewards cards – mainly those where Qantas points are the main attractions for cardholders.Credit: Peter Braig

Sally Tindall, the head of research at RateCity, says some of these fee increases are among the steepest she has seen.

She says hundreds of thousands of people are affected by the fee increases, and should be checking if they are still getting value for money.

The vast majority of the increases are for rewards cards - mainly those where Qantas points are the main attractions for cardholders.

HSBC increased its annual ongoing fee for new holders of its Platinum Qantas credit card by $200, from $99 to $299 in late August, while at the same time decreasing its fee on its Premier World Mastercard from $99 to zero.

A spokesperson for HSBC says the “earn rate” for Qantas points has been increased for the Platinum Qantas credit card for the first 12 months to 1.5 Qantas points per $1 spend. RateCity says the ongoing points cap has also been increased.

In July, St George, Bank of Melbourne and BankSA, which are owned by Westpac, increased the total annual fee on their Amplify Platinum Qantas cards by $100, from $99 to $199.

The Commonwealth Bank in late August increased the monthly fee for those with an Awards Card that is earning Qantas points by $67, from $89 to a total of $156 a year, with smaller fee increases on some of its other cards.

New holders of the Awards card no longer have the option to earn Qantas points with the card; however, Qantas points are available on its Smart Award and Ultimate card.

RateCity’s Sally Tindall says some of the credit card fee increases are among the steepest she has seen.Credit: Michael Quelch

Westpac will increase fees on its Westpac Altitude (Qantas and Velocity) Black credit card by 23 per cent, from $300 to $370, starting in early November for existing cardholders. For new cardholders, the change was in June.

A spokesperson for Westpac says the bank offers a “variety of credit cards to meet the varying needs of our customers, including cards with low annual fee and low rate options”.

In early June, the annual fee on the Qantas Premier Platinum card was increased by $100, from $299 to $399, after the 12-month discounted fee offer ends.

RateCity’s Tindall says an increase in fees, an increase in interest rates or a drop in the value of points, in the case of rewards cards, should prompt consumers to re-think whether they are still getting good value from their credit card.

Even those with no changes to their cards should look at whether their card is the best fit for them, as “what was right for you a few years ago may not be right for you today because of a change in the way you spend, or your financial goals”, she says.

“Some people are happy to pay a premium for Qantas points but do not redeem the points regularly,” Tindall says.

Cards with flight points have high interest rates on debt that is not paid off in time, usually about 20 per cent a year. There are a handful of cards without flight points with interest rates below 10 per cent, Tindall says.

• Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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