In a world where the cost of living is constantly on the rise, Australians are being increasingly vigilant about their finances.

When unexpected fees crop up and leave a dent in wallets, the reaction is always swift and severe.

This was the case for Aaron Smith, as he discovered that his bank decided to hike his annual credit card fee.

Mr Smith, an HSBC credit card holder, did not have annual fees from his credit card.

However, Mr Smith received a letter informing him of an 'important change' to his HSBC Premier World MasterCard.

Mr Smith enjoyed his HSBC credit card without any annual fees before the hike. Image Credit: Pexels/Anete Lusina

The letter stated his annual credit card fee may hike up to $399 and should take effect on or after 11 March 2025.

However, the letter did not have any information or explanation about the fee increase.

Mr Smith took to social media to express his disbelief about the steep increase.

'I don't think so, HSBC,' he wrote in the post.

The post quickly garnered the attention of many Aussies as they echoed Mr Smith's frustration.

'You can't make this stuff up! B***** h***,' one commenter exclaimed.

'That's wicked. Cancel it and burn the b***** thing. That goes to executive salaries,' another said.

'This seems excessive. This is why I don't have a credit card,' another said.

Mr Smith's situation, however, was not an isolated case.

A 2023 research conducted by the financial website RateCity found that credit card fees from seven providers rose by 200 per cent within three months.

The majority of these increases were for rewards cards—cards touted for their extensive benefits, all while hiding costs.

Sally Tindall of RateCity shared that these fee hikes were among the steepest she had ever seen.

Ms Tindall urged credit card users to reassess their cards and whether they were still getting value for their money.

'What was right for you a few years ago may not be right for you today because of a change in the way you spend or your financial goals,' Ms Tindall added.

Mr Smith's issue was also part of a broader trend revealed by the Reserve Bank in its January bulletin.

Australian households have paid almost 10 per cent more in bank fees in the 2023/24 financial year.

The bulletin also stated that credit card and personal loan use has skyrocketed due to the cost-of-living pressures.

Credit card fees saw an 11 per cent increase, attributed in part to Australians spending more overseas.

Meanwhile, personal loan fees have jumped by 34 per cent.

The takeaway from Mr Smith's experience is clear: it's crucial for Australians, particularly seniors, to stay updated about their financial products.

If you find yourself facing a similar situation as Mr Smith, it's essential to weigh your options.

Can you negotiate the fee with your bank, or is it time to shop around for a better deal?

Key Takeaways

• A man expressed his shock after his credit card's annual fee jumped from $0 to $399 without any explanation.
• The man, who was an HSBC customer, wrote about his disapproval on social media, prompting others to react with astonishment and criticism.
• The rise in credit card fees coincided with an overall increase in bank fees for Australian households.
• Credit card and personal loan services saw an increase in usage and fees over the past year due to the cost-of-living pressures.

What do you think of Mr Smith's situation with his bank? Share your thoughts and opinions about credit card usage in the comments section below!

 

[Greg350]

When will people realise if CASH is no longer legal tender the banks ,financial institutions will up the fees as we have seen in this letter. AND what are we going to be able to do about it .Please EXPLAIN. I work out how much I have to pay in bills for the month and only draw out how much I need to live on . That way I cannot live above my means . I laugh every time I read these letters. Some people need to be hit in the head with a hammer to wake them up !

There is no plan to remove cash from the system, stop listening to nutcases sprouting rubbish on the internet.

And there are many accounts and credit cards that you can use that are fee free, again, stop believing everything you read. I pay NO FEES or interest on my credit cards.

 

[deni67]

Years ago Coles were offering me a credit card even though I was on a disibility pension, they said I was pre-approved so I went for it and was accepted straight away. But after careful consideration and some well timed advice I decided not to pick it up. I just knew I would use it and put myself in financial debt for a very long time.

 

[tekkac]

Typical bank ripoff

 

[mylittletibbies]

It's convenient to pay by credit card, I put every transaction through there, a good record keeping tool and I need to spend $2,000 per month to keep it fee free. Pay it off at the end of every month (done today) so no interest and no fees.

That makes sense, but having your credit card $6 000 in credit doesn't when you could have that money in an interest bearing account.
You can just as easily raid your credit card as you can a savings account if you have no willpower.
It doesn't make any sense financially.

 

[mylittletibbies]

Unfortunately there are many Australians who have credit cards which they use frivolously and at the end of the month don't have the money to pay the account and so end up copping exorbitant credit card interest fees...this goes on and on and they end up owing far too much which adds to their overall financial woes.

So true

 

[mylittletibbies]

I don't have it (the $6k) in a savings account because it's too easy to raid it & spend on something else other than the bills!

It's just as easy to raid your credit card.

 

[Wayneo]

Simple solution. Don't have a credit card.
I only use my debit card

If you are constantly using a credit card you are living beyond your means.

Banks charge a fee for having a card.
What a joke, credit cards are a cash cow to banks the interest they charge is astronomical. and then they have the hide to charge you a fee for having one.
Cut them up and save yourself a fortune.

Some people use credit cards to their advantage and usually pay it back to avoid interest not all people using them are living beyond their means.

 

[mylittletibbies]

Some people use credit cards to their advantage and usually pay it back to avoid interest not all people using them are living beyond their means.

No. I realise that. But research has shown that the lower socio-economic portion of the community. that is those who can least afford it and perhaps do not have the best money budgeting skills are the ones trapped in this credit cycle.
I know several people who have more than one credit card and use one to make the payments on another. Robbing Peter to pay Paul and setting themselves up for disaster.
Banks should not be allowed to issue more than one credit card per person and their ability to repay should be carefully scrutinised.
I even know one family who got themselves into so much strife they had to sell their home, in a poor market at a loss still owing the bank money on the house and over $50,000 in debt on 4 credit cards, when the husband was made redundant
They had to declare bankrupt and are now in their late 70s , relying on their children to survive on the pension.
Some people just don't know how to handle money and banks have a lot to answer for in allowing people to get into so much debt.

 

[havingadoggyday]

Simple solution. Don't have a credit card.
I only use my debit card

If you are constantly using a credit card you are living beyond your means.

Banks charge a fee for having a card.
What a joke, credit cards are a cash cow to banks the interest they charge is astronomical. and then they have the hide to charge you a fee for having one.
Cut them up and save yourself a fortune.

No, I don't live beyond my means.I put everything on our credit card and we pay it off every month.Also there are cards that have zero fees and no international transaction fees.I know cos I just got one and used it overseas.O fees.do some research.We did.Our coles MasterCard wlas costing 199 per year....it also went up.from $99.Luckiy the extra points I get for putting everything on it pays itself three times over in a year.I put all bills etc everything possible,even pay my years medical in one go.Try it

Also everyone's financial situations are different.If on a government pension and paying rent in your retirement,your situation may differ from a self funded retiree that can choose what they need to survive on and get paid accordingly per month.

 

[havingadoggyday]

No. I realise that. But research has shown that the lower socio-economic portion of the community. that is those who can least afford it and perhaps do not have the best money budgeting skills are the ones trapped in this credit cycle.
I know several people who have more than one credit card and use one to make the payments on another. Robbing Peter to pay Paul and setting themselves up for disaster.
Banks should not be allowed to issue more than one credit card per person and their ability to repay should be carefully scrutinised.
I even know one family who got themselves into so much strife they had to sell their home, in a poor market at a loss still owing the bank money on the house and over $50,000 in debt on 4 credit cards, when the husband was made redundant
They had to declare bankrupt and are now in their late 70s , relying on their children to survive on the pension.
Some people just don't know how to handle money and banks have a lot to answer for in allowing people to get into so much debt.

I'm this case above,Id hardly blame 70 year Olds finances on a credit card.

Sounds like they have had issues with money for a long time.We MUST TAKE SOME RESPONSIBILITY FOR OUR FINANCES.

 

[mylittletibbies]

No, I don't live beyond my means.I put everything on our credit card and we pay it off every month.Also there are cards that have zero fees and no international transaction fees.I know cos I just got one and used it overseas.O fees.do some research.We did.Our coles MasterCard wlas costing 199 per year....it also went up.from $99.Luckiy the extra points I get for putting everything on it pays itself three times over in a year.I put all bills etc everything possible,even pay my years medical in one go.Try it

Also everyone's financial situations are different.If on a government pension and paying rent in your retirement,your situation may differ from a self funded retiree that can choose what they need to survive on and get paid accordingly per month.

I don't need to research or try it, I don't want or need a credit card.

 

[Soxylox]

That's just ludicrous. Especially since there was no fee on this card before. I no longer have credit cards and now I'm glad I don't