VISA is reportedly set to hike fees for purchases ordered in the UK from Europe – sparking fears shoppers will pay more for goods.
Sky News reports that Visa will increase its so-called interchange fee for online credit card payments to 1.5% – up to five times the 0.3% rate it is now.
For debit card transactions, the rate will go up from 0.2% to 1.15%, it has been reported.
On a credit card payment worth £100, the fee will rise from £1.20 to £1.50, while for debit cards it will rise from 20p to £1.15.
The charges won't apply to in-store transactions, for example if you're using your UK bank card while abroad in the EU.
The fee increase is said to have been sparked by the UK leaving the European Union and follows similar action from rival Mastercard.
How to apply for a credit card
HERE is everything you need to know about applying for a credit card:
Which card do you need: The first thing you need to do if figure out what kind card you are going to need.
Luckily for you, you are in the right place as this article will explain what kind of card you need for your situation.
Check your credit score: Your credit score determines how reliable you are when it comes to borrowing money.
The better your credit score the more likely it is that banks will accept you for the best deals.
When you apply for a credit card your bank will check your credit score to see if you suitable for the deal they are offering.
If you have a bad credit rating the bank may not want to lend you money in case you can't pay it back.
You can find out how to check your credit score here
Don't apply all over the place: If you just apply for loads of different deals you may end up hurting your chances of getting the best deals.
If you apply and your application gets refused it will leave a mark on your credit file which means that providers might be less likely to lend to you.
Always check using an eligibility such as MoneySuperMarket's Smart Search to see how likely you are to be accepted for a credit card.
Don't believe everything you see: Just because you see a credit card advertised with a great rate online, it doesn't mean that that is the rate you will end up getting.
By law credit card companies have to give the rate they advertise to the 51% of the people who successfully apply for a credit card.
But, depending on your credit score you might get a different interest rate or a shorter 0% period.
You don't have to accept the rate you are offered and you can always shop around for a better deal.
Fill in your application form: Once you have decided on the card you are after just fill in the online form on the credit card company's website.
Try to be as honest as possible with your credit details.
If your application is declined it might be worth asking the bank for a copy of your credit file to see why it is that you weren't accepted for the credit card.
If you are accepted can take a week or two for your card to arrive.
Visa is said to be ready to notify 4,000 clients later this week about the fee increases, and has allegedly already notified regulators.
The payments company declined to comment about the report when asked by The Sun this afternoon.
It isn't clear how soon an increase in fees from Visa could come into force, but Sky News suggests the firm will give its clients six months to implement the changes.
The move would bring it in line with MasterCard, which confirmed it will be hiking fees from October 2021.
MasterCard will charge companies 1.5% of the transaction value on every online credit card payment made from the UK to the EU, up from 0.3%.
Both Visa and Mastercard charge merchants a fee on behalf of banks every time a credit or debit card payment uses their network.
In 2015, the EU introduced a cap to stop firms from being slapped with bills worth hundreds of millions of euros and higher costs for shoppers.
But Mastercard told companies the limit no longer applies to payments made between the two nations now that the UK has left the EU.
At the time, MPs had expressed fears that extra costs will be pushed onto shoppers, according to the Financial Times.
However, we don't know yet if prices will increase as a result of the fees or whether merchants will bear the brunt of the costs.
More to follow…
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