The changes are in response to Reserve Bank reforms, the bank says, adding that it can no longer afford to have customers accumulating hundreds of thousands of loyalty points on large purchases and then paying off card balances quickly to avoid interest charges.
"The Reserve Bank reforms will present challenges for our loyalty cards," says an ANZ spokesman. "The reduction in interchange and the exclusion of loyalty costs from interchange pricing means there is a reduced ability to cover the costs of buying reward points for customers who put very high levels of expenditure through their credit cards."
Interchange is the fee that banks charge each other for processing credit card transactions. It was generating an estimated $600 million a year for the banks.
Under the Reserve Bank reforms, this fee will be halved, with the benefits passed back to retailers, who are expected to pass this on to consumers by offering them cheaper prices.
ANZ lifted its annual credit card fees by 48 per cent in late 2002 and has attracted Australia's largest card customer base with 900,000 participants.
Meanwhile, the Aussie Group is still weeks away from deciding if it will launch its own branded credit card, managing director John Symond says. The group currently offers a credit card through its relationship with American Express.
