As we're more likely to use some form of borrowing in the run-up to Christmas, we could find ourselves falling prey to interest rates and other fees accumulated during our purchases. It is estimated that these processing charges cost the average household over £40 per year.

The fees - branded an ‘unfair tax' by leading retailers and the Office of Fair Trading - helped push up prices on the high street, from the weekly shop to dinner at a restaurant.

But a ruling from the European Union has forced credit card companies to think about the fees they charge for the processing of credit and debit cards. The ruling relates to card authorisation charges imposed on consumers travelling to other EU member states.

Smaller shops have to pay banks higher rates than their mass-turnover rivals, and usually ask consumers using debit and credit cards for a small fee to cover the charge. As a result of the EU ruling, top retailers promised to pass on the savings that should flow as a result of the ruling.

These fees hit all consumers, whether they use cards or not. Credit card companies have now been told to slash the fees they charge shops in order to authorise sales, which have been branded an ‘unfair tax' on consumers.

The recent EU ruling could mean a price fall of up to £1bn a year in the UK, but experts warn that previous efforts to enforce such fees have seen the industry respond with fee increases and the introduction of new ones.

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