According to Stollmann, Tyro’s analysis of the annual $230 billion credit and debit card spend shows Australia’s 10 million standard card users pay about $50 each to support the country’s five million premium and platinum alternatives.

Premium credit cards attract a range of benefits such as air travel, overseas holidays and other lifestyle advantages, and Stollmann says the low income earners are subsidising cheaper air travel, holidays and fine wine for the rich.

“About 10 million Australians have a standard credit or debit card, and they pay about $500 million per year, or $50 each, in extra fees to subsidise the lifestyles of five million richer Aussies with a premium card,” Stollmann said.

“This is because retailers typically charge customers a standard 1% rate irrespective of what type of card is used.

“But banks charge retailers much higher fees for premium and platinum credit cards than standard cards used by lower income people. Effectively, this means the poor are subsiding the rich.

“This is unfair, unjustified and unAustralian. Credit cards are now the great divider in our society. Banks get away with it because most people don’t know it is happening. Their secret is out now.”

According to Stollmann, hidden bank fees on credit and debit cards were up to 10 times higher for small businesses than big retailers and 6.7 times higher for low income consumers than high net worth individuals.

“Tyro estimates that small businesses have to pay $300 million more in hidden fees for Visa and MasterCard purchases than the big retailers.

“This is a dramatic injustice and it is getting worse.

“Why should lower income Australians and small businesses fund the generous reward programs of platinum and super premium cards for the wealthy?”

“Australia’s 390,000 small and medium sized businesses (SMEs) employ more than seven million Australians and are the engine of jobs growth in this country, yet they are having to compete with financial lead in their saddle bags, courtesy of our major banks.

“These charges are essentially invisible to the average customer. They are unfair. The best option is to ban these interchange fees altogether.”

Stollmann says the practice of banning interchange fees was identified as a policy option in the Federal Government’s recent Interim Report of the Financial System Inquiry, “the most far reaching inquiry of its kind in more than 15 years”.

“We hope that when David Murray hands the final report of the Financial System Inquiry to Treasurer Joe Hockey later this month, an end will be put to this injustice.”