Debit and credit card charges to be banned
23rd December 2011
The Treasury has announced that 'excessive' card fees will be banned by the end of 2012. But will travellers really be better off?
Earlier today the Government announced plans to prohibit companies from charging 'excessive' fees when travellers buy items such as flights, train or ferry tickets. The move comes amid complaints that airlines and booking agencies are imposing extra charges simply for making a payment. The Office of Fair Trading calculated that travellers spent £300m on card surcharges in the airline industry in 2010.
Currently, Ryanair charges an 'administration fee' of £6 per person, per flight on both credit and debit cards. EasyJet charges £8 per booking made by debit card (plus an extra 2% if booking by credit card).
Under the proposed plans companies will still be able to impose a 'small charge' to cover payment processing costs. Richard Lloyd, executive director of Which? revealed that debit card transactions cost the trader 'around 20p' and credit cards cost '1-2% of the total price'.
The BBC quoted Lloyd as saying, "Given that airline passengers alone pay more than £265,000 a day in card surcharges, businesses should not drag their feet over this. While the law will come into force at the end of 2012, we want companies to be upfront and fair over card charges today."
The question that has arisen from the announcements is whether passengers will actually be better off in 2013 when the charges are scrapped or will the various companies affected, simply find a new way to charge customers extra fees.
More like this
Travel companies under scrutiny over hidden card charges | News... More
Travellers pay 'too much' for foreign currency | News... More
Passenger 'mutiny' over Ryanair baggage charges | News... More
Banks to scrap foreign currency fees | News... More
Don't get caught out by hidden baggage charges on your next trip, check out our ultimate budget airline baggage guide | Advice... More