Do you use Mastercard credit cards? If so, then stay alert for possible rising costs when you use it to buy products online from the EU. Mastercard has warned that its credit card fees may rise by the end of 2021 for internet purchases from the EU. Stores may face charges of up to five times the amount they were used to before Brexit. These charges could be passed onto customers.
The benefits (and drawbacks) of a credit card
Using credit cards can be a great way to purchase items. By buying items costing over £100 with a credit card, you are protected under a law called Section 75. So this means you could get your money back if there is a problem. It’s a legal protection and means that you won’t be faced with paying back a debt on something you did not receive or was not as described.
The most important consideration of using a credit card is to pay back as much as you can each month. Ideally, you can clear your balance. This means you will not be charged any interest on your debt, as there will be no debt. So only spend on a credit card what you can afford.
A credit card is not a cheap way to bottom money. Interest rates can be high, meaning a loan from your bank can often be a better option if you need a lot of money quickly. It’s also a good idea to see if you are able to claim any benefits like Universal Credit if you have lost your job or are seeing a sudden drop in income for any reason.
So those who shop online from European businesses should be aware that there’s a good chance costs will rise in 2021. Although it is companies that Mastercard plan on charging directly, most companies will at least consider passing these costs onto you, the consumer. They will do this by increasing the cost of items you want to buy.
It’s not just items that could increase in cost – holidays could too. If you book a holiday abroad, and the holiday company is based in the EU, then it might cost more than usual. Fortunately, the fee will only be for online purchases. Anything bought using a Mastercard physically whilst in Europe will not face an increased credit card transaction fee.
If you would like to find out more about credit cards, credit card fees or credit card debt management, then get in touch with us. Book an appointment and we will be happy to offer credit card advice. We can chat through solutions to any financial worries you may be having.Contact us