A cap on credit card fees is an EU propaganda gesture that will drive up bank charges

Published Mar 10, 2015

Steven_Woolfe.jpegA cap on credit card fees is an EU propaganda gesture that will drive up bank charges and the experience of similar caps in Australia, Spain and America shows credit card companies and banks just shift the fees to other consumer charges

Steven Woolfe, UKIP MEP for the North West and spokesman on finance, called today's vote in the European Parliament "a propaganda move by the EU to try to make people believe that eurocrats can regulate costs out of existence."
The vote will allow the European Commission to impose a limit on fees paid by retailers to banks when customers make payments by credit and debit cards.

But Woolfe said: "All this cap will do is ensure the banks and credit card companies move the fees somewhere else. Someone always pays and that someone is always the individual consumer."

"The EU wants consumers to believe a command from Brussels can force businesses to provide something for nothing. It can't. Bottom line is the consumer always pays."

"When similar caps were tried in Australia and Spain customers found they had to pay 50 percent more for their credit cards. In America, when the federal government imposed a cap, 94 percent of customers experienced no significant savings, while major retailers got a windfall worth £5.3bn ($8bn) because they did not pass on savings to customers."

"In Spain, retailers walked away with a €2.7bn (£1.9bn) windfall over five years but there is no evidence of prices having fallen for consumers."

"Major retailers will be the big winners in this windfall once it is forced onto credit card companies and banks across the 28 member states. This is another example of the way the EU protects big business at the expense of small and medium enterprises."

Agree? Share!