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Credit Card Ripoff: Visa/Mastercard's "Foreign transaction fee" : What is the EU doing about it? - by Cory Doctorow
It doesn't matter if you use an ATM, buy over the Internet/phone, or walk into a store -- the credit-card companies always dip their beaks. When you pay your hotel bill, when you buy a plane ticket, every time you use Amazon.uk to order a British release (Citibank told me that they even charge the fee when I withdraw from my Citibank US account while at a Citibank UK ATM, using Citibank's own network!). What makes this such a rip-off is that the credit-card companies already charge a fee -- up to five percent! -- to the merchants for processing the transaction. So Mastercard and Visa are getting a slice from the store, and a slice from the customer. In a global marketplace, Mastercard and Visa are acting like letting you spend your own money is a special service deserving its own fee. The Citibank rep I spoke to told me that the fee used to be one percent, and that it was hidden on the credit-card bills, but that in 2006, the fees tripled and Citi started to break them out on the bill so you could see how badly you're getting hosed.
Note EU-Digest: About 23 billion card payments are made annually in the EU with an overall value of 1.35 trillion euros ($1.63 trillion) from a combination of merchant fees, customer fees and handling charges paid between banks and card providers.Credit and debit cards such as Visa and MasterCard are racking up "abnormal" and "excessive" profits for banks. In 2006 European Union antitrust chief Neelie Kroes said: "The more the payment card industry does on its own initiative, the less they are likely to face action under antitrust rules ". Unfortunately not much has happened to correct this profiteering by the credit card and banking companies in Europe or anywhere else in the world.
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