Credit card reforms a win for consumers

What looks at face value like a win for retailers and a loss for customers who use credit cards is really a victory for consumers. According to the Reserve Bank, the average cut in credit-card merchant service fees has been about 25 per cent. The total saving for retailers last year was about $500 million. As a result, credit-card holders have had their fees increased and their reward schemes cut. But credit-card users are not the only consumers. Before the reforms, people who did not use credit cards were effectively required to subsidise those who did. A good part of the saving on the merchant service fees should be finding its way into lower retail prices. Indeed, now would be a good time to ask for an additional discount for paying by cash or debit card.