EU to cut card fees, which is good news for all!

18 July 2013

credit cardsMillions of us look like we're going to benefit from plans by the EU to cut transaction fees on debit and credit cards. These fees are paid by retailers and businesses to banks every time someone uses their card.

The EU proposals involve a potential cap on what are called "interchange" fees.

Businesses pay different interchange rates to the banks, but on average, debit card transactions cost the retailer around 0.2% of the bill, with credit card transactions costing more, at around 0.9%.

New plans want to cap debit card fees at 0.2% and credit card fees at 0.3%.

"It's hugely significant, and massively positive," said Richard Braham, head of payments at the British Retail Consortium (BRC). "There's definitely more that can be done, on a domestic level, to reduce the exorbitantly high fees."

This is under the assumption that retailers will pass on these savings. And the banks aren't happy, saying that they stand to lose about £1.2bn worth of revenue.

TOPICS:   World News   Credit Cards


  • Big D.
    OOOOOOOOOOOOOH a saving of either .6% or 0%.
  • Bri
    We're just going to go back to what we used to have - credit cards with no rewards and annual charges.
  • Jack
    So I'm going to pay an annual fee for the privilege of paying interest, too? No. Fuckoff.
  • jaffacake
    I'll be sorry to lose my 0.5% cashback from my Asda Credit card which I pay off in full each month, but in the long run if credit cards don't reward us AND charge an annual fee, surely less people will have one, so there will be less people tempted to get into debt? it's good news in the long run, perhaps?
  • fibbingarchie
    Do you honestly think the retailers will pass on the cost savings? The average retailer doesn't currently give cash buyers a discount.
  • Captain W.
    Gutted, was quite happy earning 3% cashback on my card purchases with others picking up the tab. It looks like slow stoozing will soon be the only way to get any kind of cashback from daily credit card usage, and that won't yield much with today's interest rates.
  • Mike O.
    "the banks aren’t happy, saying that they stand to lose about £1.2bn worth of revenue." Oh dear. What a shame. Never mind.
  • Justin A.
    I remember cancelling a Barclaycard about 10 years ago because they started an annual fee and I wasn't using the card anyway. I've got a new Barclaycard right now and there's no annual fee, so the idea was so unpopular and therefore money losing, that it was dropped. I can't imagine rewards disappearing. My Tesco clubcard will be a lot less worthwhile if it doesn't give extra Clubcard points anymore.
  • Big M.
    @fibbingarchie that's because there's a handling charge for cash - probably more than cards.
  • Terry
    @fibbingarchie: is right. The only time it is cheaper to deal with cash is small outlets or market stalls. Imagine moving large amounts of change and notes around. Handling, security, processing, etc..

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