/ Money

Councils sneaking in hidden card charges

Lots of cards

Extra charges to make payments by card are never welcome, but do you expect your local council to charge you more? Sadly, we found many are doing just that.

When we first started our research into charges for paying by card, we had little idea of the extent to which these unpopular fees were levied.

It came as no surprise that budget airlines were among the worst offenders – many of you cited them in your responses to our earlier Conversation about being charged to pay by card. But we were flabbergasted to discover debit and credit card fees with Ryanair could total as much as 42% of your transaction value.

Equally, while travel agents have been known to impose surcharges, who could’ve predicted that one holiday with Saga could see you run up a whopping £470 charge to pay by credit card?

Councils making card charges

But most unexpected of all was discovering that over 50 local authorities around the country charge residents to make payments by card. This ranges from Council Tax to penalty charges for street littering and car parking tickets. Meals on wheels, school dinners, housing rents and registrars were other services that could also potentially attract a surcharge.

The argument about whether or not card charges should be imposed is a complex one – unfortunately there aren’t any easy answers.

Who should foot the cost?

From a merchant’s point of view, surcharges are seen as a fair way of passing on the costs of processing card payments to consumers. On the other hand, many believe these costs are part of doing business, and merchants should bear this burden themselves.

To confuse things further, the issue of processing costs is contentious in itself, involving banks, card providers and even governments.

From a consumer’s point of view, however, charges that claim to involve card processing costs can sometimes seem completely out of proportion to the transaction value.

Too often, surcharges may seem like an excuse for shameless profiteering. While councils may only be recuperating their costs in levying card charges, they’re doing little to end a culture of insidious hidden charges.


It’s all a con. Banks charge their customers for ALL transmission, handling cash, processing cheques etc. If they use the argument that the councils are charged for card transactions, they should use the same argument for paying by cash or cheque! Are they going to pass these charges on as well?

Robert says:
29 September 2010

I assume Councils do not pass on charges for cash or cheque, although these are more expensive than online payments or direct debits, is that not everyone is happy to pay electronically.

However, I can see the day coming when this will change. Revenue collection should be cost neutral to the council, so cheaper methods of payment should get a discount and more expensive ones pay extra.

Maurice says:
29 September 2010

Confusing question at the heading. “Do you agree or disagree” WITH WHAT?? and how to change you mind if you made a mistake?

Thanks for your comment Maurice. The agree/disagree thumbs at the top of the article are for you to pass your judgement in a quick way. Do you agree with the article or not? If you’d like to elaborate on this, just make a comment.

john from cheshire says:
29 September 2010

If you get a parking fine you should pay the full whack and don’t get expect to get your 1% cash-back by using credit card! If you buy a service from a council it is different from a commercial business – their fees and charges are universal. We all pay our council tax and if people choose to use credit card etc then why should the many subsidize that. A credit card charge at 2-3% by Amex etc (where i get 1.25% cashback) has to be paid for by someone and i agree it should be the user.

Robert says:
29 September 2010

Agree with John, if you voluntarily choose to use a form of payment that is more expensive for the Council, why should other people pick up the tab? As long as there is no profiteering, unlike the airlines, and the charges are disclosed up front, I am in favour of public bodies charging more for compulsory payments.

For non-compulsory payments and commercial bodies, it should be up to them whether they pass on the increased charges, as long as these charges are disclosed up front, and cases of profiteering should be well publicised so these companies can be avoided!

We’ve had a look at this in the Money Podcast http://www.which.co.uk/podcasts/money/ with a clever tip about how to use your credit card to its best advantage

I broadly agree with John and Robert with the exception of the case for cashback. This is presumably paid by the the card company to the card user and is therefore irrelevant to the charging company.
I pay my council tax by direct debit which is probably cost free to the council but I don’t get a rebate. People have to be employed to deal with cash and cheques and credit card companies may charge for using their services. The net amount paid should be the same for everyone according to their council tax band.

My council argue that paying the credit card fee is taxpayers money and that is why they refuse to accept council tax payments by credit card. They may have a point. What is more annoying are charges imposed by, for instance, my local dental surgery, who charge 50p if you want to pay by credit card. Since their cost is only about 1 or 2% of the basic NHS charge for a check-up, i.e 30p, this flat rate charge is clear profiteering.

Bill Cormack says:
30 September 2010

I booked a room at Travelodge today 30th Sept 2010 and paid by visa debit card which according to them is free.I was charged a £2 credit card fee which is highly annoying,especially as they have done this to me before,I only use them as it is convenient to me .Please dont let them get away with this ,demand a refund and get this stopped now,how much are they ripping us off with this scam

eddieb says:
1 October 2010

Due to a serious banking error, my current account and all associated Direct Debits, Standing Orders, debit card and cash access were cancelled. When I reported this to my local council (re Council Tax) I was informed that a credit card payment (as opposed to my normal Direct Debit) would attract a 2.6% additional charge. Fortunately, due to the error not being mine, I have been given some leeway until the situation is resolved.

There should be no charges for any payment method. Did they charge you to pay by cheque? No! and it is a far more costly method to process. Payment by card is much cheaper unless the banks are increasing their charges unreasonably.

I agree with you otherwise it is going to get to the stage that when you fill up your car, go to a high street shop , buy online , call a tradesmen to your home , we are going to be charged extra for paying with plastic. The banks want the puplic to use plastic more in transactions so why should we have to keep paying extra for this? It overall costs them less than having to employ staff at these institutions. If it doesn’t reflect the true cost it should be factored in the costings of the product or service that is being offered.

Am I right in thinking in Ireland there can be no charges whichever payment method is used? If so why not do the same here!!

There are several angles to this. Buying an aircraft (sorry buying a heavily surcharged ticket) with Ryan Air is an optional activity. if you do not like their unfair terms, do not use their poor service. However the councils and many other ‘statuary’ bodies are NOT optional so should ensure that there are proper facilities for the payment of the relevant charge and only the EXACT charge. I visit the cash machine and give surcharging parasites the cost and job of counting cash if that is what they prefer.

Can only say my Local Council does not charge extra for any payment made by Credit Card. However if they did I’d complain to the Mayor and My MP. It worked about residents parking permit charges.

We successfully pointed out that as rate payers we already ‘pay’ for the roads – both through the Road Fund Licence and Council Tax. So why should we be expected to pay twice. The parking permit is now issued free.

I’d use the same argument about credit card charges. As rate payers we already pay all charges the council accrues – so to charge additional payments is making credit card users pay twice.and is wrong.

To use one of this disgusting Government’s sayings “We’re all in this together”