EU Tells Mastercard To Scrap Illegal Fees
This is a landmark decision. Shoppers could save billions of pounds after some credit card transaction fees were ruled illegal. The European Commission ‘s decision to ban Mastercard from charging customers for using its cards abroad.
Mastercard, which also runs Maestro, charges retailers an international interchange fee of between 0.4 and 1.2 per cent for each transaction.
Those banks are charging the retailers a 2.5 % to 3.5 % for all transactions through the credit cards. Most of those business outlets would mark up their sale price because of this cost to the bank.
Those businesses that did not mark up their prices told their customers to pay more, 2.5 % of the bank charges if they want to charge to their cards. The banks then charge the credit card holders 1.5 % per month.
Then there are the late payment charge, the annual fees and sometimes the computer glitch which can charge you more in interest. Those banks can change the terms anytime they wish.
Whether you use a credit card or not, you are paying more when you buy from those large establishments who marked up their goods. If you are a card holder, you are paying double 1.5% + 2.5% for your purchases excluding those late payment charges every month and annual fees which you may not qualify to waive. Some banks have set new terms for a free waiver. HSBC classic card, need to spend RM2K and gold RM4K in 12 months to qualify for the free waiver . Other banks may need 6 or 12 transactions for a waiver. This is not as harsh as HSBC.
Some banks like Standard Chartered have set new terms, no free 20 interest days unless you pay in full for your retail purchases in that month.. You will be charged interest the moment it is entered into your statement if you only pay the minimum at the end of the month. I hope not all the banks will follow Standard Chartered. S&C has also up their late payment charges by 100%, minimum Rm10.00 or 1 %. Previously, it was only Rm5.00. This will drive S & C credit card holders to other banks…Other banks have not announced their schemes yet.
All those new fees and terms are unfair and arbitrary. We will all have to go back to using cash.
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