In Australia, credit card issuers simply tack on a percentage—over 5% in some cases—when a customer makes a purchase using plastic. Is this where we’re headed?
How did banks start charging these percentage add-ons? The Australian government changed the rules a few years ago, limiting the way banks could assess sneaky hidden fees onto consumers, and so the banks came up with a bunch of other ways to make their money.
It’s just like one former credit card executive described in the PBS program “The Card Game.” This is the banker’s mentality:
“Tell me the rules, and then I’ll outsmart you all. You tell me the stupid laws, and I’ll comply and I’ll make money.”
The NY Times has the story on how the system works now in Australia, where, in addition to the surcharges, reward programs have grown stingier, bills must be paid off quicker than they used to, and cards are more likely to come with annual fees—and higher fees—than they did not long ago.