The great credit-card crunch... or why firms squeeze us for extra fees
Sunday 01 March 2009
As the recession bites, retailers, airlines, entertainment firms and even government departments are increasingly imposing fees on consumers when they use their credit or debit cards to pay for goods and services.
Businesses have to pay fees between 0.7 and 1 per cent to provide Visa or Mastercard facilities to their customers. But firms are adding on further charges, seemingly to boost their profits.
Some of the most common booking fees are those charged when you buy tickets online or by phone. There are charges when buying tickets for plays, films and even ice-skating. Charges for more expensive tickets can be higher: those off to Glastonbury will have paid a minimum £5 booking fee. Online booking agents such as Ticketmaster and Seetickets routinely add on card-handling or order-processing fees. These cover the cost to the card firm, call-centre overheads, and website technology. Martin Fitzgerald of Seetickets says: "It's not so much a charge for using your card; it's a charge for the service we provide to enable you to buy the ticket."
Some of the highest card fees are in the airline sector. EasyJet, Ryanair and Flybe, among others, add several pounds to bookings paid by credit or debit cards. Jemma Smith from the UK Payments Association (Apacs) says: "The amount an airline is charged by the bank for a card facility is likely to be pence. They are passing on that cost, but others too, like their internal administration, and protection from fraudulent transactions. The problem is that the fees aren't transparent. As a customer, you just want to know – why?"
Even the DVLA will charge you a £2.50 flat fee for vehicle tax and licensing payments, BT charges £1.50 per month if you pay your phone bills by card, and you'll be hit on a bit of home decoration at Ikea, too, as it charges a 70p handling fee on all credit-card transactions. David Kuo of financial website The Motley Fool (Fool.co.uk) says: "It is outrageous that banks charge pennies for handling card transactions yet retailers bump the fee up to pounds. But the harsh reality is that when the tills aren't ringing loudly then shopkeepers have to use other tactics to increase revenues. The easiest way is to sting unsuspecting customers."
So how do you get out of paying the charges? When buying tickets, your only option – though not always a practical one – is to go to the box office in person. Opting for direct-debit payment can dodge fees, and using debit instead of credit cards usually reduces, if not avoids, charges. This is true for airlines, where debit-card charges are sometimes lower and using a Visa Electron can eliminate extra costs. But avoiding handling fees completely is becoming much more difficult.
Simon Read: There may be trouble ahead for cohabiting couples who don’t make a will
Money Insider: Would £150 make you switch banks?
Gold-plated pensions – the key to retirement freedom?
Bargain Hunter: Find the deals that have real value beneath the Black Friday hype
Donald MacInnes: So it’s a no for Wonga, but a yes for the demon drink
- 1 Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by police in Ohio park
- 2 To help fuel their propaganda machine against the poor, our government has now decided to redefine the word 'welfare'
- 3 Naked free runner captured in breathtaking photographs above London's streets
- 4 Woman opens professional cuddling shop – gets 10,000 customers in first week
- 5 Manchester United named Premier League's loudest fans despite late push by Chelsea according to 'Smart Meter' app
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
France 'blocks' Russian sailors from boarding a warship
Green Party Caroline Lucas interview: 'We could be on the edge of something very big'
iJobs Money & Business
Negotiable: Argyll Scott International: Hi All, I'm currently recruiting for t...
£50000 - £60000 per annum + benefits: Argyll Scott International: A Business A...
£30000 - £35000 per annum + benefits: Ashdown Group: PR Marketing & Events Exe...
$80000 - $110000 per annum, Benefits: Bonus and Employee Investment Scheme: Se...
Day In a Page
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens