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Credit Card charges need to be cut

Published: 01/04/2011 by Comments

The Office of Fair Trading (OFT) got an immense complaint regarding the surcharges which are affecting credit and debit card owners. Which? pleaded for the start of an investigation concerning these charges as they have and still are becoming more frequent. The consumer group’s chief executive, Peter Vicary-Smith, revealed that taxi firms, hotels and also councils are together inquiring for additional fees when people make payments via credit cards. Mr. Vicary-Smith then said: “Consumers are really fed up with paying excessive card charges. So far, over 40,000 people have pledged their support for our campaign to bring these to an end”. Which?‘s research had shown which companies ask for such expensive fees, among them being Ryanair. This company takes about £40 in fees per booking a return flight for a family of four members, if they use the credit card as a payment method.

The use of credit cards to make payments would become less of a fund strain if the Office of Fair Trading will prohibit retailers to charge such huge surcharges. Some costs may seem too tiny to be brought to people’s attention, but 20p for processing a payment and 2pc for a transaction are just the smallest fees available. There are even bigger numbers available for these types of fees. Foxtons charges another £25 for a deposit of £5,000 on a credit card. The big fees are established with a purpose, and no by chance. People don’t usually carry £5,000 or more in cash, and rather prefer to store that amount on a credit card.

Another example is the booking website called The Trainline, which invokes the sum of £3.50 as fee for one credit card payment. Two taxi firms called Dial-a-Car and Radio Taxis have a fee of about 12.5pc. More than 40,000 people are avid supporters of the campaign started by Which?. Peter Vicary-Smith said: “Low-cost airlines are some of the worst offenders but these card surcharges are becoming ever more widespread, with everyone from cinemas and cabs to hotels and local authorities getting in on the act.” UK banks have agreed to open their arms for OFT’s investigation.

“The credit card costs are per transaction. If you are booking six tickets at once, or one ticket in one credit card booking, the processing costs would be the same. It’s hard to see how companies can charge per item.” said a spokesman for the UK Payments Association.

Bob Atkinson representing revealed: “Many travel providers are not only passing the bank charges to customers, they are actually increasing them to generate extra revenue. The fact that some holiday companies also charge for debit card payments is a worrying development.”
Supermarkets and other big companies usually hide their fees or adapt them to the size of the transaction in order to make them more acceptable by the British people.

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