Banks add new credit card fees
Australian banks have been quietly creating more fees on credit cards over the past few years. The ANZ some time ago introduced a percentage-based fee of 1.5 per cent on cash advances. Westpac customers, from June 1st, will now also be charged a 1.5 per cent fee for cash advances or a $2.50 minimum. Current charges are 65 cents for own ATMs, $2 over-the-counter and $1.25 for other banks' ATMs. The National Australia Bank and the Commonwealth Bank may well follow suit.
Catherine Wolzhuizen from the Australian Consumers' Association says it's difficult to see a justification for the new fees, as there's little evidence that they relate to the cost of providing the service. She would like to see organisations such as Australia Post, Virgin and Telstra entering the card market, slashing fees and introducing competition.
Lisa Montgomery from Infochoice says that most customers have not woken up to the changes. Moving from a flat fee to a percentage is definitely a revenue-raiser, she said, and it will be particularly nasty for people accessing money overseas.
For the banks, new credit card fees have come a long way from the first one introduced in 1993 – the annual card fee. Since then, fees for late payments, exceeding card limits and card replacements have been devised, amongst others. Chris Connolly of the Financial Services Consumer Policy Centre says that everyone comes up against card fees or interest charges now, even though the banks have trained people to think that cards are “free”.