MSE News: EU proposes card charges shake-up but will fees rise?

Former_MSE_Helen · 24 July 2013 at 4:24PM

"New European proposals aimed at cutting the cost of using debit and credit cards could see British shoppers lose out..."

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EU proposes card charges shake-up but will fees rise?

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rb10 · 24 July 2013 at 6:11PM

It's interesting that MSE suggest that banks may recoup the lost income through "the card's APR or a charge per transaction".

I'd have thought a charge per transaction is very unlikely, and instead a monthly fee is more plausible.

Charging per transaction means people will be more inclined to have a card but never use it. Once you've paid the monthly fee, you might as well use your card.

Any ideas what the rationale for the MSE comment might be?

reclusive46 · 24 July 2013 at 6:23PM

rb10 wrote: »

It's interesting that MSE suggest that banks may recoup the lost income through "the card's APR or a charge per transaction".

I'd have thought a charge per transaction is very unlikely, and instead a monthly fee is more plausible.

Charging per transaction means people will be more inclined to have a card but never use it. Once you've paid the monthly fee, you might as well use your card.

Any ideas what the rationale for the MSE comment might be?

There basing it on the fact that charges per transaction were introduced after similar regulations were brought in other countries, especially on debit cards.

I have no doubt that these changes will negatively effect the consumer. I just hope the UK regulators have some sense to go against this in the UK.

Gordon_the_Moron · 24 July 2013 at 10:07PM

Brilliant idea of course.

Force the banks/card providers to cut their fees to retailers, making them offer worse deals to consumers (no cash back cards, fees for using debit cards, higher APRs etc)

However we will get lower costs from retailers as they pass on their savings to their customers. Yes of course they will! :wall:

reclusive46 · 24 July 2013 at 10:08PM

Gordon_the_Moron wrote: »

However we will get lower costs from retailers as they pass on their savings to their customers. Yes of course they will! :wall:

More chance of seeing pigs fly than retailers lowering prices. This will only benefit larger merchants as well, small merchants will probably be charged even more as acquirers will probably raise monthly fees to offset interchange loss.

Roger1 · 25 July 2013 at 7:03AM

I was surprised to see that as much as 70% of EU credit card use was by UK cardholders. I was aware that card use in some EU countries such as Germany was way below the UK (and France). When I lived in Germany, I noted that cash was king even for major purchases such as of furniture.

So it seems that the impact of this suggestion if it goes through will be mainly affect UK cardholders.

As a good European, I generally mock the Daily Mail/Daily Telegraph 'them and us' theories but perhaps they will take up the cudgels with the politicians.

brewerdave · 25 July 2013 at 8:01AM

If Bank A started to charge an annual fee for a card, then they will rapidly lose customers to Bank B - It's happened before - competition will stop it.
Can anyone imagine Tesco charging for their Mastercard? I think not!!

Millennium · 25 July 2013 at 2:49PM

Now, what did I do with my cheque book?

withnell · 25 July 2013 at 3:16PM

brewerdave wrote: »

If Bank A started to charge an annual fee for a card, then they will rapidly lose customers to Bank B - It's happened before - competition will stop it.
Can anyone imagine Tesco charging for their Mastercard? I think not!!

Not that many years ago people were charged for current accounts that dropped below a certain level - Tesco aren't going to run their business at a loss - I'd think it's likely that all banks would introduce a charge on the day the regulations come into effect

Butterfly_Brain · 25 July 2013 at 5:52PM

I am going to keep using cash and they can keep their plastic

PegasusPJ · 31 July 2013 at 2:14PM

Roger1 wrote: »

I was surprised to see that as much as 70% of EU credit card use was by UK cardholders. I was aware that card use in some EU countries such as Germany was way below the UK (and France). When I lived in Germany, I noted that cash was king even for major purchases such as of furniture.

So it seems that the impact of this suggestion if it goes through will be mainly affect UK cardholders.

As a good European, I generally mock the Daily Mail/Daily Telegraph 'them and us' theories but perhaps they will take up the cudgels with the politicians.

the higher number of CC here I presume is due to the fact that cards are free.

In France, you have to pay annual fees even for Debit cards (the only thing you don't pay for is a card allowing to withdraw cash in your own bank only, not other banks).

So I have 3 CC and 2 debit cards here and nothing in France (even though I have an account) 'cos I refuse to pay to access my own money.

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MSE News: EU proposes card charges shake-up but will fees rise?

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