EU orders credit card firms to cut “outrageous” fees

The EU competition commissioner Neelie Kroes has issued an ultimatum to credit card providers to cut their “outrageous” fees or face legal action.

Ms Kroes targeted her comments at credit card issuing companies Visa and MasterCard as well as banks and described their “abnormal” profits as “completely unacceptable”.

“I am not against profit, which is vital to innovate and invest … but competition is missing,” she said.

“It’s a closed shop and there’s no cross-border activity, and consumers and small firms are paying for it.”

The Competition Commission has estimated that consumers in EU states would benefit by several hundred euros a year if the credit and debit card markets worked effectively.

Her comments come just a week after the UK’s Office of Fair Trading issued an ultimatum to banks that they must cut fees by more than half or face legal action.

Britain is home to around 60 per cent of the EU’s credit cards, and debit card usage is also far higher than in other EU states.

Credit card users can find the best rate deals online.

© Adfero Ltd

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