CBA and Westpac Still Charging Some Long-Term Customers Over-Limit Fees, Dubbed a “Loyalty Tax” — Sydney Auction Clearance Rate at 56%

Weekly Market Focus

CBA and Westpac are still charging some long-term credit card customers an AUD $15 over-limit fee, despite such fees being banned by default for new accounts since 2012. Under reforms introduced at the time, banks generally cannot automatically charge customers for exceeding their credit limit on credit card accounts opened after June 2012. However, older accounts are not fully covered by the ban, allowing the two banks to legally continue charging the fee to some long-standing customers.

Both CBA and Westpac have confirmed that some credit card accounts opened before mid-2012 may still incur an AUD $15 fee, generally no more than once a month, if the account exceeds its credit limit. The fee may continue to apply even if a customer has since received a replacement card or their bank has automatically migrated them to a newer card product, provided the underlying credit account was originally opened before the reforms took effect. By comparison, NAB removed over-limit fees for all of its credit card customers before the ban came into effect, while ANZ continues to charge the fee on some older accounts.

Consumer advocates have described the practice as a “loyalty tax”, arguing that long-term customers can end up paying more despite remaining with the same bank for years. They have also raised concerns that the fees may disproportionately affect lower-income customers and those who face greater barriers to switching banks or credit products.

CBA said it is reviewing its credit card products and fees, and noted that customers can choose to disable the ability to exceed their credit limit. Westpac has similarly said long-term customers can contact the bank to arrange for transactions to be declined when there is insufficient available credit. Neither bank has disclosed how many customers are still subject to the fee.

Last Week’s Auction Results

Sydney: A total of 709 properties were taken to auction, with results reported for 433 properties. Of these, 245 were sold, resulting in a 57% clearance rate. The total auction value reached AUD 238,148,388, with a median sale price of AUD 1,590,000.

Melbourne: A total of 654 properties were taken to auction, with results reported for 481 properties. Of these, 285 were sold, resulting in a 59% clearance rate. The total auction value reached AUD 190,042,088, with a median sale price of AUD 932,000.