Multiple card fees 'stinging Aussies'

Charging consumers multiple times for single credit card transactions is unfair, numerous consumer groups claim.

The practice where people are charged multiple times for a single credit card transaction needs to be halted, it has been suggested.

Following the Reserve Bank of Australia's (RBA) decision in 2003 to allow merchants to pass the charges imposed on them by banks for online credit card transactions back to customers, Katherine Lane, principal solicitor of the Consumer Credit Legal Centre, claims there a "free-for-all" has been created.

Airlines in particular have been criticised for imposing multiple charges, although the practice is entirely legal.

Under the Australian banking decision, credit card fees are imposed on a 'per person, per flight' basis, the Brisbane Times reports.

As an example, it was revealed that a person looking to book flights for a group of four travelling on a return flight will be charged eight times for using their card despite there only being a single transaction taking place.

"The 'per person, per flight' payment is artificial; it's really only one transaction. It is an area where competition is failing and people are getting stung," Ms Lane states.

Meanwhile, Choice spokesperson Christopher Zinn points out that while RBA figures show transaction fees across all credit card purchases has fallen from an average of 1.45 per cent to 0.88 per cent over the last five years, some airlines are charging upwards of ten per cent.

He adds that the consumer group has raised the matter with the bank and is now looking to the Australian Prudential Regulation Authority to consider introducing a cap to ensure that the card fees charged are a fair reflection of the costs that airlines incur.

Those looking to negate the financial impact of making such online transactions may want to consider searching for a credit card that offers an interest free period on purchases.

Aussies may also be interested to hear that ANZ Bank recently announced it is to reduce charges on over-limit and late payment charges on its credit card products from $50 to $35. With a number of fees attached to transaction accounts, mortgages and other products also due to be cut or abolished, acting chief of Australian operations Graham Hodges claims the movers will save people $140 million a year.

Written by Nate Sawyer