/ Money

Stop charging us to pay by card

Debit card

Why do extra charges for paying by card always pop up at the final stage of online shopping? Why don’t they get absorbed into the overall cost so we don’t get unwelcome – and unfair – charges added to our bills.

When recently buying a budget flight to Istanbul, I rightly expected to be bombarded with recommendations for pricey hotels and expensive cars for hire.

A few deft clicks in ‘No Thanks’ boxes – it’s obvious a night at the Hilton or the keys to a Humvee aren’t part of my budget – and I avoided some key assaults on my wallet. But what about the costs you can’t avoid?

It might be fair to pay for extra luggage, but what about paying for – well – making a payment? The airline charged me £3.50 for having the cheek to use that most rare and awkward of payment methods, the Visa debit card.

Companies who charge you to pay by card – airlines being among the worst culprits – often claim these charges reflect the costs they incur for processing card payments. But processing payments is an unavoidable part of buying a flight online, so why isn’t it absorbed into the normal price for the flight?

By the same logic, should we expect an itemised bill showing the added expense of having wings fitted on the plane?

Of course, certain budget airlines point to niche payment methods where you can dodge these charges, such as Ryanair and prepaid Mastercards. But is it fair to advertise a price when the majority of people don’t have the payment method that makes them eligible for it?

Either way, I was in need of a holiday and begrudgingly paid the £3.50. I can’t pretend I walked the streets of Istanbul worrying about it, nor did I lay awake at night listening to the waves crashing on the Bosphorous, contemplating what untold wonders £3.50 might have afforded me in the bazaars. Even so, I’d prefer a system that treats all cardholders equally.

Isn’t it about time companies stopped charging us to pay by card? What’s the worst charging offence that you’ve suffered in the past?

Han says:
14 July 2010

This is sooo true. Ryanair are teh worst – they charge you a fee on using ANY credit or debit card – but the fee is per ticket you purchase its SUCH a rip off.

Profile photo of Ben Ross

I think this is true – but that said, I think shops are right to insist that they don't take American Express. As I understand it, the model for AmEx is that they charge the retailer an extra one or two percent, and then give it back to users as cashback. So, basically, they're making it so that their users pay a percentage less than everyone else.

Why should I subsidise other people's purchases, just because they choose to use a card that is deliberately made more expensive for the good people offering their goods or services?

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As I have been around some time. I remember when it was against the law for retailers to charge extra for you using a Credit Card.

Peter Taylor says:
23 July 2010

I think it is still against the law to offer goods at a different price for paying by card. Businesses get around this law by charging the same price for cash or card, but then adding on a "handling charge" for making a payment by Credit Card.

Ann Hay says:
15 July 2010

If the threatened death of the cheque book comes about, how are we expected to pay for things then ? Wadges of cash ? That's asking to be mugged.

Toneboy says:
15 July 2010

This is a steadily creeping practise and if you do any online or teleshopping then there is a good chance you now be hit with a credit card processing charge from around 50p thru to £3.50. Some will just charge a flat fee for the whole transaction where as others will charge a fee per ticket purchased, normally airlines or theatre companies.

I am led to believe that the card companies charge the retailer around 34p per transaction, so it would appear these retailer and service providers are using card processing charges as a pure revenue stream.

I object to this, but like many others feel I am powerless to stop the process other than refusing to do business with the organization, but it is not always the solution if you need that service or item and the retailer is the only one providing it.

Perhaps Which should make this a campaign issue.

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We are encouraged to carry less cash, and find fewer places to pay by cheque so the banks will get their own greedy way again and again once they have forced us to pay larger amounts by card. The solution will be 'contact' cards paying for many items, but they will then charge for that once enough of us switch. But remember they only charge us because most of us find it easier and more convenient to use them.

Ian Dow says:
23 July 2010

Having been involved in a business that handles both cash & credit cards, it costs more to process cash than it does to handle credit cards. You need more staff time to handle the cash, and the bank charges more as well. These charges are becoming more common and they are not justified. It is just another way of making the basic price look cheaper than that of the competition, when it is not true.

Neil Lucas says:
23 July 2010

Travel industry firms continue to go bust leaving customers to be refunded by ABTA etc, but if you book your own travel arrangements separately (not as a package) you run a greater risk of loss unless you pay by credit card. Debit cards might be cheaper with the online travel industry but don't give any protection. I don't like paying extra for credit card but sometimes its worth it for the added protection.

Peter Taylor says:
23 July 2010

My bank charged me £15 when I purchased £1000 worth of Australian dollars from my travel agent (in the UK) and used a VISA debit card to pay. I could understand a charge if I was using a credit card, but I felt I was being charged to access my own money, which was already deposited with my bank. I complained to my bank but was told it was in their "terms and conditions" relating to use of debit card. Only when I put in a complaint to the Financial Services Ombudsman did the bank back down and refund my £15 as a one-off "gesture of goodwill". Its about time more people complained about unfair, and unjustified, charges.

Chris Flower says:
23 July 2010

To be charged extra for the 'convenience' of paying by card, sometimes on top of a booking fee (and what's that if not a hidden charge?) leaves a smell in the air that lingers by the name of the company you have just done business with. The memory of the experience is not a good one. Companies wanting our custom might do well to think again.

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Flights are a robbers' market. It's a double-bind. If you phone to book tickets, it costs extra. If you book on line, whatever you save by so doing is then spent using a credit card to buy it.

Tonybh says:
23 July 2010

As a business owner, I would like to point out that the costs of accepting credit/debit cards for payment are as follows:

2% for Visa/Mastercards ie: £20 for every £1000
3% for American Express ie: £30 for every £1000
28 pence for a debit card any amount
My bank charges 64 pence to pay a cheque of any amount into our business account, so from this
you can see we would rather people pay by debit card.

Why should someone paying me £1000 by credit card effectively get the item for £980 when the person paying by debit card effectively pays £999-72p?

Mr R Marshall says:
23 July 2010

I had same problem with BMI Baby – 2 tickets Edinburgh to East Midlands. I was charged £3 for each flight using a visa debit card ie (4X £3) £12!!!

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Holiday companies seem to be the worst for charging when you make a booking I have just paid an extra £10 50 by National Holidays for an holiday in england.

B parker says:
26 July 2010

Checking my recent credit card statement from Halifax , expecting a nil balance as I paid in full, I was charged interest. I paid the balance 2 weeks early as well, so I rang and they pointed out that you have to be in credit for 2 months before no interest is is charged, this rule added since September 2008. This escaped my notice, probably not in large print.
Apparently even though it was credited for good will I still had to pay the balance to keep in credit for the second month.

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TonyBH’s point (3 up) is a very good and informative one.
I used to work in retail back in the late 80’s when Barclay’s Connect came out -the first Debit Card. At that time the company I worked for (Beatties of London – model and toy chain) refused to accept Connect because the law said that we could not charge extra for taking the card but the banks happily charged US extra – a LOT extra at the time – for processing the Debit card transactions. At that time it was MUCH cheaper for us, the retailer, to accept Mastercard and Visa Credit cards – so much so that you hardly noticed the difference – than it was to take Connect.
Eventually rising public demand and an increased range of Debit cards meant that we gave in, but within the company it was perfectly openly know, as I am sure it is in most companies now, that our prices across the board went up by a penny or 2 here and there to cover the increased bank charges. That meant that ALL customers, regardless of how they paid, were penalised for us taking debit cards.
TonyBH’s post indicates that the situation is now almost in reverse with Debit cards being cheapest of all cards to process – and I should **** well think so too since it is the BANKS who are forcing customers to use these more and more often by trying to make it harder for us to get at our own cash (at least without penalty) and making Cheque transactions so expensive to process and unreliable too that retailers naturally want to stop taking them. I imagine that if the charges for Debit cards were still astronomical as they were in the 80’s there would probably have been an outcry from customers and retailers alike at the Banks’ measures to "kill off" cheques.
The fact remains, however, that cash has only the labour costs associated with it and if it was not for the unsafe society in which we live cash would be the best way to pay.
I regularly use a Credit Card for payment and make a point of avoiding the Debit Card as much as possible: now I’ve read TonyBH’s post I may change that – my reason has always been a recollection of the costs of taking Connect, but if I was paying by cash why should I not get a lower price? My cash transaction would be cheapest of the lot to process. (And by the way, don’t forget that Banks have also now made it all but impossible to accept cards without an electronic terminal (PDQ’s as they used to be called), and these do not come free, make a ‘phone call at the retailers’ expense for EVERY transaction and use electricity and consumables (audit rolls, etc) which all cost the retailer money, so the cost of using a card is not limited to the figures quoted by TonyBH as his figures do not seem to take account of the ‘phone bills, the electricity and so on.)
I admit that I am playing Devil’s Advocate to some extent here, but frankly what exactly is wrong with charging Card holders a fee for using the card? I would be willing to pay it every time and I think that the general public should accept that if they want to use plastic then it is not free! The only justification for abolishing all card related fees would be if the banks actually subsidised the retailers for taking the cards, which some retailers probably think they should do given that the banks invented the cards, not the retailers.

Patricia Leaver says:
1 August 2010

I returned from a lovely holiday on Friday evening. I booked it the previous Friday on the Internet and knew I would have to pay by card. When I saw the fees involved for using Master Card I decided to use my debit card – they still charged me 1% for the use of that card – I find this outrageous. It added another £11 odd to the cost and the £15 I had to pay for late booking !

maxwell keith bruce says:
6 August 2010

I fully gree with the campaign to have charges (if any ) right up front, and to charge per passenger as Ryanair do is almost criminal

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As a customer I think it is reasonable to be charged for using a credit card as it costs the company you are dealing with. If the credit card costs are included in the price, why should a customer paying cash subsidise those using credit cars. More likely, the cash paying customer will go off to another company where the cost is cheaper because it won’t subsidise credit card users. So, in the current financial climate where magines are small, it seems to me inevitable that companies will increasingly be forced to charge for the use of credit cards.

I guess the days of ‘free’ credit are over.


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I have no poblems with being charged for using a credit card – I understand this is relatively expensive for the retailer, and PROVIDED they state the charge UPFRONT I can decide whether I want the insurance and to pay the fee,or not. What I do object to is being charged for debit card use – if you are taking online payments this should be the EXPECTED way to pay, and included in the overall cost, OR only finding out about the charge at the very end.

Emily says:
26 August 2010

It’s not the fact that they’re charging you fees for paying by card that’s the problem – it’s that these fees don’t appear until the last stages of booking AND that they’re often not reflective of what it’s costing the company to process your card payment… for example charging the card per ticket rather than per transaction, or charging a flat fee for a debit card purchase of a relatively small amount (for example several £s fee on £5 Ryanair flight). A fair system would see those who paid by card charged a fee that’s a percentage of their spend – a percentage that is the same (or very similar) to that imposed on the business by the bank/credit card company.


I don’t think debit and credit charges should be integrated into the price of things it is unfair to people that pay cash. However, I do believe the charges should reflect the true cost. Companies and council should not make extra money out of charges made by banks. I think companies like RyanAir who charge per ticket rather than transaction should be disciplined but the UK government is more interested in pandering to business rather than looking after the people that elected them to office. Shame.

drlnb says:
8 December 2010

Unbelievably MARK WARNER have just tried to charge me a flat 2% on a £1600 holiday as a charge for using a credit card. That is £32 ……..I think this may border on fraud, and if it doesn’t then it should

scurs says:
8 February 2011

Hi,Chek out norfolk line ferries, no charge if payment is made useing euro based credit /debit card.charge for sterling based card ranges between£1 & £4.50 but no charge if you use paypal??which is usually paid via credit card,perhaps it is time that we had a petition to get us in line with the rest of Europe.

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I just had an advertising brochure from Costco to me, as a business. It offers “Merchant Credit and Debit Card Processing 1.1% per credit card transaction and 11p per debit card transaction”. So use that as a benchmark when questioning the charges made3 by other suppliers to you. any more that this is clearly profiteering and should be illegal.

Ken Saunders says:
15 May 2011

I have just booked 4 tickets with Aer Lingus to Malaga, and they have charged me £12 PER PERSON, I was paying as a one of payment, I strongly believe this is totally unfair.

Mike says:
24 August 2011

I was charged £12 by Santander for settling a loan using my DEDIT card. This transaction was completely automated when I telephoned. It costs Santander nothing to process this payment and I even have to pay 10p per minute for the priviledge of using the phone system.

michelle grant says:
13 August 2013

worse than the open charges are the ones the banks are raking in, when a company requests a payment the funds are put on hold for 48 hours after which the money is relaeased back into your account, many retailers are not claiming this money within the 48hr period so the money goes bank on your account and if like me you take your balance available as gospel you spend it then low and behold the retailer comes in when theres no money in your account and the bank by law has to honour the payment and you go into a negative balance and incur charges if you dont have an overdraft !!!!! only in the last 4 months has this started happening to me on a frequent basis, the bank certainly getting back all the charges they refunded me last year slowly but surely