Save Money – Ripoff card fees

Passengers booking online pay £265,000 per day in unfair card transaction fees in the United Kingdom alone.  These fees are added by the airlines.

When you book a flight online, airlines do not accept cash as payment.  That makes some sense.  What happens next is a rip-off: For nearly every other method of payment some airlines add an additional fee, so that it is almost impossible to escape paying a higher price than was advertised.

The UK’s Office of Fair Trade (OFT) has been investigating credit card charges since 2006 and their findings have shown that these ‘drip pricing’ fees are exorbitant and unfair.

As Germany’s Federal Court of Justice found in May 2010 “By not accepting cash payments, Ryanair offered customers no opportunity to pay for flights without paying extra.”  At that time Ryanair accepted payment via relatively rare Visa Electron cards.  (Visa Electron cards are not issued at all in the US and Canada, Ireland and Australia.  In the UK bank only one major bank still issues the card at all now, and that is usually for low-end and children’s accounts.)

(Ryanair currently accepts payment by MasterCard Prepaid without penalties.  However this card is not cheap to use as there are fees for loading cash, transaction fees levied by the issuing bank, foreign exchange fees and even changes for disuse.  The fees vary between banks.)

It is not just the low-cost airlines that participate in this unfair practice, though one of them charges as much as £8 per booking.  British Airways charges £4.50 per online booking.  Troubled Thomas Cook charges as much as £50 in card fees for journeys to their most exotic destinations.

Hidden transaction fees are already banned in Europe for debit cards.  An EU Consumer Rights Directive has also been issued that will ban the practice outright for all cards from mid-2014.  Not content with waiting until then, the UK has announced that it is introducing legislation to ban it by the end of 2012.

The new regulations will still permit a small charge to cover the actual cost of accepting payment, which is likely to be at most 2% of a credit card transaction, or 20p for a debit card purchase.  At present the charges being levied are as much as 3 or 4%.

The really contentious point about card fees is not so much that one is charged them, but that you are often only informed at the end of the transaction, once you have completed a lot of purchaser information. WHAM!  Unexpected fees that completely alter the price of the flight.

Our advice is that you do a ‘test run’ online when you think that you have found the flight bargain that you were looking for.  It could be that after all fees have been taken into account, the second or third choice may actually be cheaper.

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