DEBIT and credit cards have a broader function of improving financial inclusion and aiding consumers to access financial services in a convenient way.
But a recent survey by the Consumer Council of Fiji revealed that consumers had to incur "hidden costs" because of fees charged by merchants for using either credit or debit cards.
It has noted that excessive fees and restrictive conditions are common amongst merchants operating in rural areas or in areas where income and financial literacy levels are low.
Today, we look at the benefits of such cards, the expectations of consumers for keeping credit/debit cards and what the consumer watchdog suggests should be done.
IT is a norm now for people to keep debit and credit cards.
The vast majority of people keep debit cards mainly to withdraw money from their bank accounts or to make purchases or payments at EFTPOS facilities. On the other hand, those who are able to afford the payments keep credit cards, some mostly for overseas travels.
But the hidden costs associated with keeping such cards is something which drains people, especially the poor or middle class, of their money even if it means "a little bit".
The burden of paying off the credit for things purchased through credit cards, not forgetting the interest, becomes too much of a headache for some people.
It is also common knowledge that some people owing money to institutions and individuals also evade phone calls when they know who is calling.
The situation becomes such for many people that they end up being stressed and getting into more debts to pay off their credit card arrears, with the interest charged.
With the situation faced by many holders of credit and debit cards, the country's consumer watchdog has programs in place for people.
In the past five years, the Consumer Council of Fiji has stepped up its campaigns for consumer protection in financial services.
The council says consumers are facing difficulties with the rapid pace of financial innovation, the growing complexity of financial risks and responsibilities associated with new products and services.
Its campaign aims to increase consumers access to fair and competitive financial markets where high standards of disclosure, transparency, redress and choice are promoted and upheld.
One key focus area of the campaign has been on fees and charges imposed by financial service providers and third parties.
The council is of the view that too many fees and charges imposed by financial institutions and third parties reduce consumer access to financial services and products, and constraint consumers from benefitting from advances in technology.
Council chief executive officer Premila Kumar said in a submission to the Reserve Bank of Fiji in May that "any fees or charges that are imposed unfairly and of which the consumer has not consented to when subscribing to a financial service or product should be removed and outlawed."
The council says there is evidence that surcharging is going on in the market and this practice violates consumers' rights to disclosure and right of use of credit/debit cards. It is also of the view that consumer education is the responsibility of the banks and it should extend to the use of debit cards as well.
The council says banks should be more involved in monitoring merchants who they have agreements with.
Apart from the apparent disregard for consumer rights to disclosure, merchants who impose card fees are actually putting the banks' names in disrepute.
"It is the responsibility of the banks to ensure that merchants do not exploit consumers because the product or service they are using, that is credit/debit card is issued by the bank and not the merchant," said the consumer watchdog.