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Airlines still charging fees ahead of surcharge ban

By UK CreditCards.com

Published: 5 March 2012

 
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A number of airlines are still charging people extra to pay by debit or credit card, despite an imminent ban on disproportionate charges, a study has revealed. Research by campaign group Which? shows that, while a handful of airlines have reduced or removed their card surcharges, others have raised them since the launch of the group's super-complaint last year.

What is the surcharge ban all about?
In March 2011, Which? submitted a super-complaint to the Office of Fair Trading (OFT), arguing that low-cost airlines and other companies were charging excessive fees whenever customers chose to pay by debit or credit card. While the campaign group accepted that retailers face a small cost when processing card payments, it pointed out that the surcharges faced by consumers often far outweigh the processing costs. airline-surcharges

The OFT agreed with Which? and is planning to take action against companies who fail to be transparent about their surcharges. But the government decided to take things one step further and is banning all excessive surcharges by the end of 2012. This means that, in the future, any charges imposed on cardholders will have to reflect the processing costs paid by retailers.

What is the current situation?
At the moment, the size of debit and credit card charges varies widely between airlines. According to the Which? research, return flights for a family of four costing a total of £500 incur debit card surcharges of £48 with some airlines, while the same family spending £2,000 on flights would have to pay a massive £146.59 in surcharges with Jet2 if they choose to pay by credit card.

Which? also discovered that some airlines have increased their surcharges since the super-complaint. Flybe, bmibaby, Jet2 and Ryanair have all increased their surcharges, while Swiss and Lufthansa have introduced new surcharges for credit card payments.

However, Which? also emphasised that some airlines have taken steps in the right direction. Monarch has abandoned debit card charges and now charges a flat fee of £10 per credit card transaction. And easyJet has altered its charging structure so that customers now pay a flat fee of £9 per transaction, regardless of whether they are using a debit or credit card -- and the fee is made clear to passengers throughout the booking process.

The findings highlight the importance of bearing these surcharges in mind when choosing between different airlines and budgeting them into the cost of your trip.

See related: Plastic card transaction fees stir debate; 'Excessive' card surcharges  continue to draw fire

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