Credit card surcharges to be curtailed
If you're sick of paying a huge surcharge just to use a credit card, then you'll be glad to hear that should no longer be the case.
From March 18, Reserve Bank reforms mean surcharges applied to credit card payments by retailers have to be capped at what is a "reasonable cost to the retailer".
Consumer group Choice says a reasonable cost is, on average, less than 1% for Visa and MasterCard and about 2% for American Express and Diners Club cards. Consumers stand to save $350 million a year thanks to the new rules, estimates Tyro Payments.
"The charges have been far too excessive up until now. We hope to see much more transparency around these sort of charges for consumers," says Jeremy Cabral, the publisher of Finder.com.au. The worst offenders have been Cabcharge and airlines, says Choice.
"I would not be surprised if the airlines and taxi companies have made subtle changes over the last year in preparation for this legislation change to try and 'cushion' some of the revenue losses that will result from this," says Cabral.
Virgin Australia, for example, introduced a booking and service fee last year to replace the surcharge. You should keep an eye out for things like this.
We may not see the results immediately, though. Mike Ebstein from MWE Consulting, says: "The restraint of excessive surcharging is likely to take some time to be addressed. It will be necessary for the card schemes to work in collaboration with the merchant acquirers to establish if the surcharges are indeed excessive, but it remains unclear just how this will work."
Choice agrees. "Although we probably won't see an end to excessive surcharging by all retailers immediately, we should start seeing sharp reductions in overinflated surcharges as the new rules take hold," it says.
The problem, however, is that no official agency will enforce the changes, explains Choice.
It's up to the major credit card companies (e.g., Visa, MasterCard, Amex and Diners Club) to keep retailers in line.
Choice recommends that consumers avoid businesses that charge a surcharge, especially if it sounds excessive, and let them know about it.
And if you are asked to pay an excessive surcharge, make sure you complain to your bank and credit card company.
You may also want to sign petitions such as the one on change.org asking Jetstar to drop the $8.50 surcharge on airfares.
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