Banks in $9bn card fee bonanza - theage.com.au

By Matt Wade and Duncan Hughes
May 20, 2005

The hidden cost of credit to ordinary customers has more than doubled.
The nation's banks last year earned more from credit cards than from housing loans, amassing a record $9 billion in fees from ordinary customers and businesses, a Reserve Bank report says.
The banks' fee income grew 4 per cent in 2004, or $327 million, underpinned by a 30 per cent surge in credit card fees, the bank revealed yesterday.
This growth was due entirely to fees that non-business customers paid - these fees rose 12 per cent to $3.44 billion.
Changes in the hidden interchange fees that banks and card companies charged on credit card transactions crimped fees collected from businesses by about $500 million a year.
These changes, which the Reserve Bank imposed late in 2003, reduced overall bank fees charged to businesses by 1 per cent to $5.56 billion.
But banks recouped some of this loss by lifting fees on credit cards, which jumped $180 million to $800 million.
AdvertisementFees from the big banks' credit cards have more than doubled since 2001 and have been growing at an average 29 per cent a year since 1998.
The average annual fee on a standard credit card was $38 in 2000. Last year it was $85, the report said.
Separate figures released yesterday showed overall credit card debt reached a record $30.27 billion in March, with the number of cards increasing to almost 12 million.
The average outstanding card debt was $2565.

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