Finance Minister Jim Flaherty has proposed new rules that will give credit card consumers a minimum 21-day interest-free grace period on all new purchases when they pay their monthly balance in full.
The Canadian Restaurant and Foodservices Association (CRFA) see Flaherty’s proposal as a first step to addressing increasing interchange fees that merchants pay.
Justin Taylor is the Vice President Labour and Taxation for the Canadian Restaurant and Foodservices Association (CRFA).
He tells Bayshore Broadcasting News that while the announcement focused on protection for cardholders, the Minister recognized concerns about the interchange fees that merchants pay as well.
Interchange fee’s are something merchants pay processing companies each time they accept credit cards.
Taylor says the fee’s are a major concern because last spring new fees were added on for processing credit card transactions and then again in the fall the fee schedule was changed from one flat fee to a matrix of various fee’s.
To add insult to injury, Taylor says they also came out with new ultra premium cards that have new benefits for the card holder but a much higher fee for the merchant to accept them.
He says because those fee’s are charged to merchants and restaurant owners they get passed on to consumers in terms of higher menu and store prices.
The Senate recently concluded a study on credit cards and related fees with a report expected shortly.
Minister Flaherty said his government is closely following the committee hearings in the House of Commons and will be able to act quickly on their recommendations.
Taylor says CRFA are thrilled that the Minister recognizes there are two types of credit card consumers: those who use cards to make payments and those who accept payments by credit card.