In a world where the cost of living is constantly on the rise, Australians are all too familiar with the pinch of increased prices. But for one Aussie, the sting of a sudden fee hike on his credit card was more than just a pinch—it was a slap in the face. Aaron Smith was left utterly gobsmacked when he received a letter from HSBC informing him that his annual credit card fee on his HSBC Premier World MasterCard would skyrocket from a comfortable $0 to a staggering $399.
The news, which spread like wildfire across social media, has left many Australians questioning the justification behind such a drastic increase. ‘From $0 to $399 per year? I don’t think so @HSBC,’ Mr Smith voiced his disbelief on social media, a sentiment that resonated with thousands, as his post garnered over 35,000 views in just 48 hours.
The reactions from the public were a mix of shock and outrage. Comments ranged from disbelief to calls for action, with one user suggesting, ‘That’s wicked. Cancel it and burn the bloody thing. That goes to executive salaries.’ Another chimed in, ‘That would be an automatic cancellation of card.’ The sentiment was clear: Australians were not going to take this lying down.
When probed for an explanation, a spokesperson for HSBC Australia offered a rather opaque response, stating that the bank is ‘committed to providing our customers with high quality credit card products’ and that ‘the recent fee adjustments will ensure we continue to offer competitive rewards.’ But what does this mean for the average cardholder?
Research by financial comparison website RateCity in 2023 revealed a worrying trend: credit card fees from seven providers had risen by as much as 200 per cent within a mere three-month period. The majority of these increases were for rewards cards, which begs the question—are the rewards worth the new price tag?
Sally Tindall of RateCity warned consumers that these fee hikes were among the steepest she’d ever seen, urging cardholders to reassess whether they were still getting value for their money. ‘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 advised.
This fee increase comes on the heels of a report by the Reserve Bank, which revealed that Australian households paid almost 10 per cent more in bank fees in the 2023/24 financial year. Credit card and personal loan use have surged, driven by the escalating cost of living. Credit card fees alone saw an 11 per cent increase, attributed in part to Australians spending abroad post-pandemic.
The rise in personal loan fees, which saw a 34 per cent increase, further illustrates the financial strain on households. As RBA analyst Robert Gao explained, ‘With more households using their Australian credit and debit cards at overseas businesses, banks earned more fees on international transactions and foreign currency conversions.’
As credit card fees continue to rise, many are left wondering: Is it worth the cost of the rewards? Have you experienced a similar fee hike, and how did you handle it? What strategies have you used to manage or avoid rising fees? We’d love to hear your thoughts and stories. Share your experiences in the comments below, and let’s help each other navigate these financial challenges together!
Also read: Could numberless credit cards be the key to outsmarting scammers?
Do you homework regarding fees and rewards. Dump the card if the fees are too high and go to another bank. Never be loyal to any of these banks as they aren’t loyal to you.