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Bank Rip-Offs Revealed - Click
for Video
19-Sep-2003
The court battle between the Reserve Bank of Australia (RBA) and US based MasterCard and Visa International has now drawn to a close. Federal Court judge Brian Tamberlin, who has president over the hearings since their commencement in May this year, handed down his judgement in favour of the RBA last Friday.
We covered the background to this issue in our 19-May-2003 update Court Battle Begins over Interchange Fee Reforms. In essence, the court's decision now paves the way for merchants to apply a surcharge to goods purchased using a credit card. It also opens up the credit card market to new, non-bank entrants, and reduces the "interchange fees" which the banks have been charging each other, fees which are indirectly passed onto the customer via higher prices as merchants have sought to recoup their costs.
As a result of the decision, the changes instigated by the RBA will now come into effect on October 1, resulting in an average 40% cut in interchange fees and savings of up to $600 million in the first year of the reform.
Many banks have already implemented fee hikes and slashed loyalty rewards in anticipation of these reforms. One of the most popular cards used in Australia is ANZ's Qantas and Telstra Visa cards. At the start of the year, the ANZ jacked up their "Credit Card Account Fee" from $27 to $40, and their "Reward Program Services Fee" from $33 to $55, representing a whopping 59% fee hike.
Qantas Visa card holders have until now been awarded 1 frequent flyer point per dollar spent, but the ANZ has moved to cap this to the first $1500 spent p/mth ($2500 for the Gold card) from October 31. Users will now only be awarded 1 point for every $2 spent above these limits, and no points at all for monthly spends above $5000 ($10,000 for Gold Card holders). The ANZ will also no longer be offering double points on foreign currency transactions.
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