Why Your Credit Card is Suddenly Becoming Much Less Useful

It was less than a week before I was due to head overseas on a long-planned overseas trip recently, when I learned exactly how thoroughly credit card reward programs were being stripped of valuable things like travel insurance.

I had already used my credit card to pay for some of the trip to make sure conditions for the card’s free travel insurance were met.

I had also sent through a detailed notice of my trip, and received a reassuring letter of eligibility that covered overseas emergency assistance up to $20 million, travel cancellation to $25,000 per person, and many other benefits.

The policy was all printed out and in with my travel documents and we were ready to go when the email arrived from the insurance company used by the credit card company.

Cancel Culture Rife

“We are contacting you regarding your recently issued Letter of Eligibility for your complimentary international travel insurance,” the letter read.

“As your travel dates are on or around 15 May 2026, your coverage may be impacted due to recent changes communicated by your bank.”

“As advised, your credit card will no longer include international travel insurance, domestic travel insurance, or rental vehicle excess insurance from 15 May 2026.”

There was some other guff too but the basic message was clear: even if you paid to qualify for it, and we sent you out a letter of eligibility and a fancy looking policy with very few coverage restrictions, your free travel insurance is now absolutely useless, indeed, non-existent.

The bad news is that I am far from alone in getting a rude shock that long standing credit card add-ons are simply no longer operating.

Although, from a contractual point of view it is perhaps a bit beyond the pale to issue a dated insurance eligibility and later totally void that policy at short notice.

Surcharge Ban Diluting Benefits

 The reason I, and many millions of Australian credit card users, are having to adjust to what now looks like downright dangerously ineffective travel insurance and a host of other downgrades is the ban on card surcharges from October 1 this year.

Other popular downgrades include slashing credit card point earning rates by up to half, hiking annual fees, setting maximum monthly spending limits, and getting rid of airport lounge access.

Some of the changes are immediate, while others will start operating from the day the surcharge ban comes into effect on October 1.

Banks have claimed that the Reserve Bank restrictions on interchange fees will cut around $660m a year from their credit card revenue—which is why they are restricting benefits and increasing fees so hard.

Changing Card Landscape

All of which means we are living through the biggest change to the credit card landscape for many years.

That makes it a great time to totally reassess your credit cards and land on the one which offers the most useful benefits for your particular needs.

It is a tough time to do that in the interim period with all of the schemes changing at different times but once things settle down after October 1 it should be a great time to start to shop around.

Another possibility instead of choosing a different credit card is choosing a premium debit card that offers some credit card style benefits such as points and travel insurance or simply move to a much cheaper debit card only if you can live with the inconvenience of temporarily financing “holds” with your own cash when booking travel, cars, and hotels.