SHOPPERS may have to pay extra when buying goods from the European Union after Mastercard hikes fees. The payments network company will increase fees up to five times what they are now, sparking fear among MPs that extra costs will be pushed onto shoppers, according to the Financial Times. Mastercard and Visa charge merchants a […]
SHOPPERS may have to pay extra when buying goods from the European Union after Mastercard hikes fees.
The payments network company will increase fees up to five times what they are now, sparking fear among MPs that extra costs will be pushed onto shoppers, according to the Financial Times.
Mastercard and Visa charge merchants a fee on behalf of banks every time a credit or debit card payment uses their network.
In 2015, the EU introduced a cap to stop firms from being slapped with bills worth hundreds of millions of euros and higher costs for shoppers.
But Mastercard has told companies the limit no longer applies to payments made between the two nations now that the UK has left the EU.
From October 15, Mastercard will charge companies 1.5% of the transaction value on every online credit card payment made from the UK to the EU, up 0.3%.
HERE is everything you need to know about applying for a credit card:
Which card do you need: The first thing you need to do if figure out what kind card you are going to need.
Luckily for you, you are in the right place as this article will explain what kind of card you need for your situation.
Check your credit score: Your credit score determines how reliable you are when it comes to borrowing money.
The better your credit score the more likely it is that banks will accept you for the best deals.
When you apply for a credit card your bank will check your credit score to see if you suitable for the deal they are offering.
If you have a bad credit rating the bank may not want to lend you money in case you can’t pay it back.
You can find out how to check your credit score here
Don’t apply all over the place: If you just apply for loads of different deals you may end up hurting your chances of getting the best deals.
If you apply and your application gets refused it will leave a mark on your credit file which means that providers might be less likely to lend to you.
Always check using an eligibility such as MoneySuperMarket’s Smart Search to see how likely you are to be accepted for a credit card.
Don’t believe everything you see: Just because you see a credit card advertised with a great rate online, it doesn’t mean that that is the rate you will end up getting.
By law credit card companies have to give the rate they advertise to the 51% of the people who successfully apply for a credit card.
But, depending on your credit score you might get a different interest rate or a shorter 0% period.
You don’t have to accept the rate you are offered and you can always shop around for a better deal.
Fill in your application form: Once you have decided on the card you are after just fill in the online form on the credit card company’s website.
Try to be as honest as possible with your credit details.
If your application is declined it might be worth asking the bank for a copy of your credit file to see why it is that you weren’t accepted for the credit card.
If you are accepted can take a week or two for your card to arrive.
For debit card payments, the fees will rise from 0.2% to 1.15% of the transaction value.
On a credit card payment worth £100, the fee will rise from £1.20 to £1.50, while for debit cards it will rise from 20p to £1.15.
The charges won’t apply to in-store transactions, for example if you’re using your UK bank card while abroad in the EU.
It’s not clear exactly when these charges will come into effect but Mastercard told The Sun it will be in the final quarter of the year.
As the charges are on behalf of banks and card issuers, Mastercard won’t directly benefit from the increase.
The worry is, these charges will be reflected in the price shoppers pay at the till, making it more expensive.
MPs had warned of the “very high risk” to consumers scrapping the cap would cause back in 2019, when Brexit deal negotiations were being drawn up.
“Some people might put this change down on Brexit, but it’s really just greed,” said Joel Gladwin, policy director at the Coalition for a Digital Economy, which represents UK startups.
He added: “This not only hurts the bottom line of e-commerce startups and subscriptions, which are already under pressure, but also happens at a time when numerous small businesses have switched to online models to survive.”
The fee rise will also affect services provided by companies with EU- based operations, such as airlines, hotels, car rentals and travel groups.
Callum Godwin, chief economist at payments consultancy CMSPI, said firms who have already been hit badly by the coronavirus crisis are likely to pass on the increased fees to customers as they can’t afford to take the losses.
Mastercard rival, Visa, has not yet announced plans for similar fee hikes.
Mastercard told The Sun that the fee hike was in response to the UK leave in the European Economic Area (EEA).
They said: “In practice, only EEA merchants making e-commerce sales to UK cardholders will see a change.
“Interchange is not a consumer facing cost but the fees paid between merchants and banks for the provision of payments.
“Consumers should not feel any impact of changes in interchange fees.”
Millions of Brits could be in line for a £300 payout after a landmark lawsuit against Mastercard on behalf of consumers was given the go ahead.
A judgement by the Supreme Court in December means a £14billion lawsuit against the card company, which alleges people were overcharged for years, can proceed.
