Commonwealth Bank and Westpac face criticism over legacy credit card fees

Commonwealth Bank and Westpac are facing criticism for continuing to charge overlimit fees to long-term credit card customers, a practice critics have labeled a ‘loyalty tax’. While reforms introduced by the Gillard government banned these fees for new accounts opened after June 2012, major banks are still applying them to legacy accounts established before that period.

Commonwealth Bank confirmed it is reviewing its credit card products and fees, but noted a $15 legacy fee still applies to customers with accounts opened before mid-2012 if they exceed their limit. The bank stated that customers can opt out of the overlimit feature at any time. Westpac also confirmed it continues to charge overlimit fees to accounts opened before June 2012, suggesting customers contact the bank to discuss transaction decline options to avoid such charges.

These fee structures persist despite upcoming changes from the Reserve Bank, which are expected to include a ban on card surcharges and caps on interchange fees.