"Excessive" credit card fees to be banned
17th January 2012
"Excessive" fees for using a debit or credit card to buy items such as travel or cinema tickets are set to banned by the end of 2012, under plans announced by the government.
The move comes amid complaints that airlines, booking agencies and even councils were imposing excessive charges for using a card.
However, firms will be allowed to levy a "small charge" to cover payment processing costs.
Paul Lewis from Radio 4's Moneybox programme explains.
Paul Lewis: "These charges are wrong and they shouldn't be charged and if the Government can stop it then that's great. I don't know why they're waiting until the end of next year, but that's what they've decided to do. I also should point out this will be brought in by Europe anyway because all they are doing is implementing a European law.
But the thing that worries me is this: if we take the most famous example, Ryanair, that charges more than anyone, £6.00 per journey, per person - so if a family of four go away that's £48.00 banged on your bill right at the end of the process. Now I've looked at the European law and I don't see how it can tackle that because Ryanair says that this isn't a credit card surcharge, this is an administrative cost for running their whole online booking service and they charge everybody except the few people who have a Ryanair prepaid card. And if Ryanair persist with that and say this is an administrative charge, there's nothing in this law to stop them doing it or stop them adding it right at the end."
There is a belief that because Ryanair aren't even based in the UK, this ruling at the end of 2012 won't affect them
Paul Lewis: "Well probably not. I mean they do sell things in the UK and we'll have to wait to see the details of whether it applies if you're buying things from around the world but in the UK it may not affect them even then, but when the European law comes in then it will affect them. That will be 2013 maybe 2014, but as I said, they insist and have done for two or three years, that this is an administrative charge and if they get away with it, then the other airlines could say the same and so could everybody else."