Warning over new debit and credit card fees


New charges could be levied on debit and credit cards if rules proposed by the European Commission come into force.

The proposed rules are intended to cap the fees taken by Mastercard and Visa on individual card transactions, but providers warn that they will be forced to pass the losses onto customers.

According to the Independent, the changes could lead to fee of £11 for every new debit card, and as much as £25 for credit cards, as the international companies look to cover estimated losses of £2.4 billion.

The research was commissioned by Mastercard in conjunction with consultancy firm Europe Economics and academics at the University of Essex to investigate the effect of a potential fees cap or ban.

The European Commission wants to crackdown on so-called "interchange fees" because it believes them to be anti-competitive, unfair to consumers and retailers, and in violation of legal and ethical rulings on transparency.

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Retailers are also campaigning for for interchange fees to be tackled and have set up the stopunfaircardfees.eu website.

The EU rule change would impact the whole of Europe but be felt harder in the UK as it would effectively put an end to traditional free banking. Most European banks already charge monthly fees for basic accounts, while in the UK consumers can still choose between free and paid-for accounts.

The Telegraph reports that the study also warned that the change risked impeding the recovery in bank lending.

A further announcement on the rules regarding interchange fees is expected to be published later this month.

Beware the small print

Beware the small print