Rewards credit cards vs cashback: are they still worth it after October 2026?
On 1 October 2026 the RBA cut the cap on consumer credit card interchange from 0.8% to 0.3% of each transaction and said interchange shouldn't fund rewards, and issuers have started changing their programs. A rewards or cashback card is still worth it only if you clear the balance every month and what you get back is worth more than the fees.
A rewards card earns points you redeem for flights, gift cards or goods; a cashback card credits money back to your account, either on your spending or as a one-off sign-up offer. This guide explains how each works, lists points per $1 from issuers' own sites, sets out the program changes we've confirmed, and shows how to run the numbers with the break-even calculator below.
By Better Rate Mate Editorial Team · Last reviewed
General information only. It doesn't take into account your objectives, financial situation or needs. Check the lender's key facts sheet, credit guide and TMD before you apply. We don't compare every lender, and we may earn a commission if you apply through our links.
Points break-even calculator
Does a rewards or frequent flyer card pay for itself on your spending? Enter the numbers from the card's terms.
The card costs you
$120
a year, after fees, on these numbers
| Points a year | 18,000 |
|---|---|
| Value of those points | $180 |
| Fees, less credits you'd use | −$300 |
| Net value a year | −$120 |
Break-even: about $5,000 a month of eligible spending covers the fees.
Not sure what a point is worth? How to value Qantas Points shows the method with Qantas's reward table.
Assumes the same spending every month, all of it eligible, and the earn rate and cap applying per month (many cards cap per statement period). Interest is the balance × the rate for a year, before any interest-free days. General information only, not a recommendation of any card.
The interest rate starts at the RBA's average standard credit card rate, 21.24% in September 2026. Every other figure is an example: replace it with the numbers in the card's terms.
How rewards points and cashback compare
Many rewards programs let you convert points to cashback or gift cards too, usually at a lower value per point than a good travel redemption. Our Qantas Points value guide shows how to value a redemption.
| Rewards points | Cashback | |
|---|---|---|
| What you get | Points in the bank's program or an airline program | A credit to your card account |
| How to value it | Depends on the redemption; compare with the cash price of the same thing | Face value |
| Typical form | Ongoing points per $1, often tiered and capped, plus sign-up bonuses | Often a one-off sign-up credit after a minimum spend; some cards pay ongoing cashback |
| Flexibility | Flights, upgrades, gift cards, goods, or transfer to partner programs | Reduces your balance; use it however you like |
| Expiry risk | Points can expire or be devalued when a program changes | None once credited |
| Best for | Heavy spenders who will redeem for travel | Anyone who wants a simple, certain return |
Points per $1 by program (checked 10 October 2026)
Headline earn rates on bank rewards cards, from each issuer's own page and listed alphabetically. Points from different programs aren't worth the same, so a higher number isn't automatically a better card: value the points by what you'd redeem them for, then take off the fees.
| Issuer | Card | Program | Points per $1 | Annual or monthly fee | Checked | Source |
|---|---|---|---|---|---|---|
| American Express | Explorer Credit Card | Membership Rewards | 2 points per $1 (1 per $1 at government bodies) | $395 | 10 Oct 2026 | Issuer's page |
| ANZ | ANZ Rewards Black | ANZ Rewards | 2 points per $1 up to $5,000 per statement period, then 1; none above $50,000 | $375 total | 10 Oct 2026 | Issuer's page |
| ANZ | ANZ Rewards Platinum | ANZ Rewards | 1.5 points per $1 up to $2,000 per statement period, then 0.5; none above $25,000 | $149 total | 10 Oct 2026 | Issuer's page |
| Bankwest | More World Mastercard | More Rewards | 2.5 points per $1 on the first $2,000 a month, then 0.5 | $270 | 10 Oct 2026 | Issuer's page |
| CommBank | Smart credit card | CommBank Yello | 0.5 to 1.5 points per $1 by Yello tier on everyday purchases; 2 per $1 on international transactions | $19 a month, or $0 with $2,000 of spend in the period (waiver ends 1 January 2027) | 10 Oct 2026 | Issuer's page |
| CommBank | Ultimate credit card | CommBank Yello | 0.5 to 1.5 points per $1 by Yello tier on everyday purchases; 2 per $1 on international transactions | $35 a month, or $0 with $4,000 of spend in the period (waiver ends 1 January 2027) | 10 Oct 2026 | Issuer's page |
| HSBC | Platinum Credit Card | Rewards Plus | 1.5 points per $1, up to $120,000 of spend a year | $0 in the first year, then $199 | 10 Oct 2026 | Issuer's page |
| Macquarie | Black Card (home loan customers) | Macquarie Rewards | 2 points per $1 up to $10,000 per statement period, then 0.5 | $249 | 10 Oct 2026 | Issuer's page |
| NAB | NAB Rewards Travel Card | NAB Rewards | 1.5 points per $1 | $395 | 10 Oct 2026 | Issuer's page |
| Westpac | Altitude Rewards Black | Altitude Rewards | Up to 3 points per $1 | $295, plus a $75 rewards program fee | 10 Oct 2026 | Issuer's page |
| Westpac | Altitude Rewards Platinum | Altitude Rewards | Up to 2 points per $1 | $175, plus a $75 rewards program fee | 10 Oct 2026 | Issuer's page |
What changed on 1 October 2026
Card rewards have long been funded partly by interchange: the fee a merchant's bank pays the cardholder's bank on each transaction. Following its review of merchant card payment costs, the RBA cut the cap on consumer credit card interchange from 0.8% to 0.3% of the transaction value and abolished the 0.5% weighted-average benchmark, from 1 October 2026. It also removed surcharging on eftpos, Mastercard and Visa from the same date, and American Express, UnionPay and PayPal said they would remove surcharges too.
The RBA's stated view is that interchange should not fund consumer rewards, and it noted that some issuers had said the change may prompt them to rethink how they fund rewards. The changes we could confirm on issuers' own sites are in the table below. Other programs may change too, so read your card's current terms rather than an older review.
Program changes since 1 October 2026
Changes announced by card issuers around the interchange cut, from their own notices:
| Issuer | What's changing | When |
|---|---|---|
| ANZ | New caps on the spend that earns points on its Frequent Flyer and Rewards cards, and higher cash advance fees | From 28 October 2026, according to ANZ's rates and fees page |
| CommBank | The Awards program closed and unredeemed Awards points convert one-for-one to CommBank Yello points; Smart and Ultimate cards earn Yello points by tier, and the spend-based monthly fee waiver on those cards ends | Awards closed 29 September 2026; Yello points from 1 October 2026; fee waiver removed from 1 January 2027 |
| Westpac | Changes to the complimentary insurance that comes with its credit cards | From 1 October 2026 |
Is a rewards card worth the fee? Run the numbers
Moneysmart gives a worked case worth remembering: Jen looked at a program that cost $30 a year to join and earned one point per dollar, and found she'd need to spend $5,700 to get a $25 gift card. She decided it wasn't worth it.
Do the same sum for any card: yearly points (or cashback) on your real spending, after caps and exclusions, valued the way you'd use them, minus the annual fee, any rewards fee and any points opt-in fee. If the answer is small or negative, a no annual fee card is the better deal. The frequent flyer card guide walks through the break-even step by step.
Sign-up bonuses and cashback offers
Big bonuses usually need a minimum spend within the first few months, and offer terms commonly restrict them to new customers, often excluding anyone who has held one of the issuer's cards recently. Some bonuses are paid in two parts, with the second part conditional on keeping the card into a second year, when the annual fee is charged again. Moneysmart's advice is to read the conditions and the minimum spend. Applying for cards just for bonuses adds credit enquiries to your report each time.
When neither is worth it
If you carry a balance, interest wipes out rewards: at the RBA's September 2026 average standard rate of 21.24%, a $3,000 balance costs about $637 a year in interest. That's far more than a typical card returns in points or cashback. A low rate card or a balance transfer will save more.
General information only. It doesn't take into account your objectives, financial situation or needs. Check the lender's key facts sheet, credit guide and TMD before you apply. We don't compare every lender, and we may earn a commission if you apply through our links.
What to watch for
- Points programs that change or devalue after 1 October 2026.
- Minimum spend requirements on bonuses and cashback offers.
- Bonuses split across two years, with the second tied to paying another annual fee.
- Caps and exclusions (cash advances, balance transfers, some bill payments).
- Rewards program or points opt-in fees on top of the annual fee.
Common questions
Is cashback better than rewards points?
Cashback is simpler and certain. Points can be worth more if you redeem them well for travel, and less if you use them for gift cards or goods. If you won't put effort into redemptions, cashback usually wins.
Are rewards credit cards worth it?
Only if you pay in full every month and the rewards you'd actually use are worth more than the annual fee and any rewards fees. Moneysmart's example found one program needed $5,700 of spending for a $25 gift card.
What is the most rewarding credit card?
The one that returns the most value after fees on your own spending, which depends on how much you spend, where, whether you'd hit a cap, and how you'd redeem. On those criteria the answer differs from person to person, so we don't name one: use the points table and the calculator on this page.
Why are banks changing credit card rewards?
From 1 October 2026 the RBA cut the cap on consumer credit card interchange from 0.8% to 0.3% and said interchange shouldn't fund rewards. Some issuers have changed how they fund rewards; CommBank, for example, moved its Awards cards to CommBank Yello points from that date, and ANZ is adding points caps from 28 October 2026.
Can merchants still charge a card surcharge?
From 1 October 2026 surcharging was removed on eftpos, Mastercard and Visa, and American Express, UnionPay and PayPal said they would remove surcharges from the same date.
Which credit card is easiest to get approved for?
No card skips the checks: the issuer has to assess whether you could repay the whole limit within three years, so the lower the limit you ask for, the smaller the repayment you need to show you could manage. A clean credit report helps too; see credit scores in Australia.
What are the top 4 credit cards?
There's no official top four, and we don't rank cards. The four main types are low rate, no annual fee, rewards (including frequent flyer) and balance transfer cards, and which suits you depends on whether you pay in full, carry a balance or want to clear a debt.
About the cards on this page
Card rows come from each issuer's own product, fee or rates page on the date shown, listed alphabetically by issuer. We don't rank or recommend cards. Some cards may have a link marked Sponsored, and we may earn a commission if you apply through it. That doesn't change the order or which cards are listed. Average rates are the RBA's for the month shown. Before you apply, read the card's key facts sheet and Target Market Determination, which set out its actual rates, fees and interest-free days.
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