The European Union Competition Commission has issued a specific communiqué that interchange fees for consumers must be cut across the 26 nations of the European Community. The European Commission informed the Master Card (credit card company) that it was in breach of competition rules by charging excessively high interchange fees which inflated costs to both retailers and consumers. Interchange fees are paid between banks servicing vendors and the banks servicing the cardholder. Brussels gave the company six months to withdraw its current fee structure or face heavy daily penalties if it failed to comply. The European Commission also accused the Master Card of charging high fees on cross-border transactions.

The merchant /retailer charge a 2-2.5 per cent transaction fee on your credit card purchases. The merchant has to pay a small fee to his own bank and to the company (mostly either Visa / Master) that issued the card. Be it at a hotel, mall, petrol pump or an online transaction; they all charge you this 2-2.5 per cent transaction fee. But as per rule, the transaction fee has to be paid by the merchant / retailer from his own pocket. But the amount is transferred to the customer/ buyer when it is not obligatory on the party of the customer.

Most of the people get into financial crisis due to default in credit card payment or paying credit card bills late. The fees can pile up and the interest rates can grow and it may not be possible even to pay the minimum amount of payment It is always better to pay the credit card bill in time and avoid default in payment. It is necessary to follow the credit card bills accurately and effect the payment on time. At least the minimum amount indicated in the card has to be paid in order to avoid heavy penalty. This will eliminate levy of late payment fee also. Credit cards can be great for various reasons, it is always better to know interest rates and have a good general idea of what the bill is going to be before making a purchase. Many times, those who have credit cards will make purchases, knowing they can’t make the payments - then suffer when they get the bill and aren’t able to pay it. Always make sure that enough money is available to pay the bill, or the minimum amount, the minute it arrives. This helps to remain in good standing with your company and your credit score will continue to increase. Punitive charges -- penalty fees and sharply higher interest rates after a payment is late -- compound the problems of many financially strapped consumers, sometimes making it impossible for them to pay even the minimum amount of the card and pushing them into bankruptcy.