After a decade of fee revenue runoff, the country’s four major banks are again feasting on all manner of account and transaction fees to boost their income lines.
The banks are hiking fees in response to tapering margins and loan volumes that now threaten to stymie revenue growth from interest-related activities over the next 18 months.
ANZ is the latest of the majors to rekindle its devotion to fees.
From 8 November the bank will hike total annual fees payable on a sweep of credit cards, including the ANZ Rewards Platinum card.
Holders of this card currently pay total annual fees of A$95, which will rise to $149.
While the major banks have drawn plenty of criticism from consumer advocates and politicians on their pricing conduct in relation to so-called “back-book” home loans, ANZ is also boosting the fee burden of customers holding credit cards and other loan products that have been grandfathered.
These include the ANZ Travel Adventures credit card which currently has annual fees totalling $120. The fee will rise to $175 in November.
Holders of the shelved ANZ Rewards card will cop a $15 increase to their annual fees.
Perhaps the most egregious fee hike at ANZ will take effect on 1 December when holders of an ANZ Equity Manager credit facility will have to cough up $350 to cover their annual fee.
The annual fee on this product (which is no longer for sale) is currently set at $150, but ANZ confirmed the $200 hike in emails sent customers on 10 October.
Westpac announced a raft of annual fee increases on all of its rewards cards in June.
The fee increases range between $25 and $70 for Qantas platinum and black cards, with some scheduled to take effect for existing cardholders in November.
Customers of Westpac’s regional subsidiaries – St George, Bank SA and Bank of Melbourne – were forced to absorb bigger increases in July when the annual fee on the Amplify Platinum Qantas card more than doubled to $199.
Commonwealth Bank repriced annual fees across a range of credit cards in August.
Apart from hiking fees on most rewards cards, the bank also amended terms and conditions on its Low Fee Mastercard that makes it much harder for cardholders to qualify for annual fee waivers.
Under the old terms and conditions CBA required holders of this card to spend at least $1000 in the previous year to qualify for an annual fee waiver.
Since late August, Low Fee cardholders are required to spend at least $300 on the card to avoid incurring a $3 fee at the end of each monthly billing period.
CBA has also hiked the cash advance fee payable on this card to $4 from $3.
Holders of CBA’s Low Rate Mastercard also copped a $13 increase to their annual fee to $72, which is now payable in monthly instalments.
CBA has also hiked fees levied on business customers for making cash deposits at its branches.
Since the start of October, the bank’s SME customers have been hit with a $5 fee each time they make a cash deposit.
The bank has also amended terms and conditions applying to SME customers who agree to pay a $10 monthly upfront fee for branch transactions.
Since 1 October CBA has revised its conditions to allow business customers only five free branch transactions a month for the $10 fee.
CBA previously gave business customers 20 free transactions each month in return for the flat fee.
Until this year banks have steadily reduced or abolished fees mostly in response to parliamentary inquiries casting doubt on whether they could be defended as cost-retrieval tools.
A study last year of Australian bank fees by Karl Sparks and Rachael Fitzpatrick from the Reserve Bank’s Domestic Markets Department found that total fees charged to households declined by an average of 11 per cent in the three years to the end of June 2021.
Decreases were recorded across all product segments over the three-year period, including credit cards.
According to Sparks and Fitzpatrick, banks collected $1.64 billion in fees from retail credit cardholders in 2019.
This equated to about 41 per cent of $3.96 billion in total fees levied on household customers.
In 2021, the banks snared $1.05 billion in credit card fees, which equated to 31 per cent of the $3.3 billion total fee take from Australian households.
Given the steady flow of fee increases announced by major banks since the start of June, it appears highly likely that this decade-long trend is set to end.