/ Money

We did it! Unfair card surcharges are being banned

Champagne bottle being popped open

With your support, we’ve lobbied long and hard to make ministers see sense about the unfair charges consumers have to pay when using cards. Now the hard work’s paid off – excessive surcharges are being banned!

On the first day of Christmas my true love gave to me… a ban of excessive debit and credit card surcharges.

After 43,202 pledges of support, 2,430 emails to Ed Davey, 8,765 emails to Mark Hoban MP, 12 letters from MPs (that we know about) sent to Mark Hoban, 9 parliamentary questions, 2 early day motions, 2 parliamentary debates and 40 ‘rip-off’ branded cupcakes, victory is ours – excessive debit and credit surcharges are banned!

How the ban will work

Today the government announced that it is banning excessive debit and credit card surcharges and I couldn’t be happier. This is a massive victory for thousands of you who have supported the campaign since we first submitted our super complaint to the Office of Fair Trading (OFT) in March.

The government will ban surcharges by implementing the Consumer Rights Directive – an EU law – in December 2012 rather than June 2014. This was the law we asked you to lobby Edward Davey about back in May, so all your nagging has certainly paid off – thanks Ed!

The Consumer Rights Directive will prevent excessive charges being levied. In practice, we imagine that will mean that the tiny cost of a debit card will be absorbed by the business, and credit card charges will be no more than the true cost incurred to the retailer for processing the payment. So goodbye to excessive £6 fees for a £30 flight!

Businesses need to catch-up quickly

While it’s been a lot of hard work, we’ve managed to have some fun along the way too. You may remember that back in November we sent Treasury Minister, Mark Hoban, 40 branded cupcakes as a thank you from the airlines for £40m they had earned in surcharges since June. We think it was his sweet tooth that finally drove him to doing the right thing.

Now that the government has taken action on this important issue, we want businesses to bite the bullet and quickly make the changes needed so you no longer have to pay for the privilege of paying.

I hope you’re all as excited about the ban as me, this victory is a great way to end the year and an early Christmas present for us all.


Thanks for your support Edward. It is now illegal for companies to charge excessive surcharges when paying by card – that’s more than 50p using a debit card or more than 2% if using a credit card. We’re in the process of catching out companies still charging excessively and we’re encouraging our supporters to report the offenders. If you spot an excessive charge, please report it here: http://www.which.co.uk/campaigns/card-charges/


Sadly, but not at all surprisingly given the state of the government and the banking industry, the cap of 50p on a debit card and 2% on credit cards means that the retailers are still actually going to lose out because the banks still charge vastly more to process DEBIT cards than they do to process CREDIT cards – i.e. the government has got it back to front (again).

This is a complicated issue (politically) because the government has backed the banks in trying to abolish cheques (which the banks charge far less to process, undoubtedly why they want to force everyone to use DEBIT cards, so they can make more money) and the banks have all but succeeded because in abolishing the Cheque Guarantee Scheme most retailers now won’t risk taking cheques. Therefore the government would be in an awful egg-on-face position if they limited the charge on CREDIT cards at a lower (realistic) rate than DEBIT cards as the true way in which the banks are profiteering from DEBIT cards would become better known.

The upshot is that the larger retailers will simply add a little extra onto the mark up on all goods, so that everyone, paying by all methods including cash, pays to subsidise the processing of DEBIT cards, and the smaller retailers will simply be squeezed further and more of them go to the wall.

Also the caps on the charges don’t take account of the punitive charges which the banks levy on retailers for the purchase or rental of the card terminals, the cost of the telephone call which every terminal makes every time any card is inserted, even if the transaction is aborted or declined and the cost of the electricity to run the terminals (which is infinitesimally small for one terminal but when you consider large stores with maybe 40 or 50 terminals in every branch and possibly hundreds of branches soon adds up). Not to mention the fact that the banks FINE retailers who do not process enough card transactions in a month to produce the agreed “tariff” for the bank – this fine is often in the order of several hundred pounds a month and is levied even if the retailer is just a penny short of the “tariff”.

For anyone interested in finding out more details of these issues, look at the Which? Convo’s about credit and debit card charges, cheques, the cheque guarantee scheme and Chip & PIN – there is endless detail from many people’s perspectives, including small traders who have been forced out of business by the processing charges.

I’m not saying that we should allow the free for all of sky-high charges to the customer, far from it, and from the customer’s point of view, which? and the government have made some positive steps here, at least at face value, but the upshot will be that every one of us pays a little more for every item we buy and every service we use and quite a few traders will suffer and fail …. some of them will be owned by individuals who are “customers” elsewhere.

As in so many issues, the REAL issue lies with the banks and no one, Which?, Government, or anyone else, seems willing to tackle them, even now.

Richard Owen says:
20 September 2013

So the government have banned excessive creditcard surcharges – only allowed to charge what it costs them… so https://www.gov.uk/vehicle-tax can charge £2.50 for a creditcard payment, and if my tax disc was £30, that’s 8.33% surcharge – surely it doesn’t get charged that much for a £30 payment?

So government, you brought the law in, why not abide by your own rules?


I had a merchant account in Canada and in both the USA and Canada surcharges by merchants was absolutely banned, the merchant charges to me were a percentage of the transactions, the lower the transaction average the higher the percentage cost, however it never exceeded 5% of the transaction amount. It helped also to find a bank or credit union that gave a greater break to small businesses, does anyone know if, or how, the rest of the EU charges?

Edward says:
21 September 2013

Dear hard pressed British European people,

Again and again, I become more and more convinced that this issue of credit and debit card surcharges is not going to go away unless and until all such charges are LEGALLY REMOVED.

Until WHICH? definitely start a campaign to get this government to eradicate these charges I have to tell you all that you are wasting your time and resources complaining to them.

So what are you going to do WHICH?


Hi Edward, we successfully campaigned for excessive surcharges to be banned following our campaign in 2011. Since the 6th April 2013 it’s been illegal for companies to charge more than 2% for using a credit card or 50p for using a debit card. If you catch a company charging above these amounts, please report them using our online tool. http://www.which.co.uk/campaigns/card-charges/ Thanks, Charlotte

Edward says:
23 September 2013

Dear Charlotte,

Thank you for your response.

I call upon everyone who has commented on this Which? conversation board to make their views known. Do you think that the real issue is the removal of ALL surcharges which are applied to using your Credit and Debit cards?

This has now come down to a simple issue and I hope that there will be a great response from everyone. Thanks.

R Welch says:
20 January 2014

Gatwick parking still charges £2 for anything other than a debit card payment on a £30 car park booking. 6.66%!
Are airports exempt from the law?