Credit Card Help May be Coming From Down Under
The US may be looking to Australia for help in pulling protecting its citizens from credit card debt, reports the New York Times.
Six years ago, Australia passed rules that affect how credit card companies can charge businesses for transactions. Everytime you swipe a credit card at a business, that business pays for it, sometimes as much as 1-2 percent of your transaction cost.
Australia’s credit card reform aimed to make these charges more transparent, and they placed limits on how much bank-issued cards could charge per transaction.
The US is studying the after-effects of this move. In Australia, banks and credit card companies responded by raising annual fees, reducing perks and demanding payment more quickly from consumers.
Also in Australia, many businesses began charging fees and raising prices to help cover the cost of credit card transactions. Sometimes these fees even apply to only credit card purchases, and not those made with cash or debit cards.
The goal is to push people toward using debit cards more because of their more transparent practices, fewer fees and no interest rates.
It’s an interesting case study, and maybe even a preview of what to expect as the credit card laws in the US continue to change.
Any Aussies out there care to chime in on how they feel about the credit card practices in your country?