Westpac raises Visa and Mastercard card rates

The move also comes as credit growth is running ahead of deposits in several markets, leaving banks with less room to absorb funding pressure. In Australia, Westpac has been benefiting from strong household deposits and a deposit-to-loan ratio above 80%, but the broader backdrop still points to banks defending margins as competition for savings intensifies.

Investors typically read higher card rates as a near-term earnings tailwind for lenders, even if it raises the risk of softer consumer spending later. That trade-off is especially relevant for Westpac, whose shares have rallied in recent sessions, with WBKCY rising to $13.35 on Oct. 30 from $11.66 on June 11, while the stock’s relative strength index has climbed to 75.7, a level that suggests the shares have been extended.

The card-rate move also fits a broader sector pattern. Banks are trimming deposit rates in some markets while keeping loan pricing elevated, and payment networks and card issuers such as American Express are reporting stronger fee and spending trends, underscoring how consumers continue to lean on plastic even as borrowing costs rise.

For Westpac, the key question now is whether higher Visa and Mastercard rates can support net interest income without triggering a sharper slowdown in card spending or a rise in delinquencies. Investors will be watching for any sign that the bank’s pricing power is easing as competition intensifies across consumer credit.