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Airline Tickets Purchased by Credit Card? Beware the Fees

Consumer groups, like Fairer Finance (FF), keep their eyes open on behalf of shoppers everywhere. This includes examinations of the credit card surcharges required by many airlines. After some research, FF identified some of the biggest airline offenders regarding these fees, and questions if they are even allowed.

Highest Fees on Flights

Some of the airlines with the highest surcharges include Flybe and Monarch, both charging 3 percent, and Ryanair and Flight Centre at 2 percent. On a £300 ticket, that comes out to £9 and £6 respectively.

By comparison, British Airways charges a flat £5 regardless of the cost of your ticket. So the £300 ticket would be £5, but so would a £1,000 ticket.

Jet2 doesn’t charge any credit card surcharges, regardless of the price of the ticket.

Consumer Rights and Regulations

The Consumer Rights (Payment Surcharges) Regulations of 2012 prevent retailers from charging consumers any amount higher than the cost of processing the payment. Commonly, this refers to the interchange fees charged by credit card processors.

Most people are aware of interchange fees in general. However, few people know the exact amount charged. That means, when a retailer tells you the fee for using your credit card is 3 percent, you don’t automatically question that. But FF believes that 3 percent is much too high.

Interchange Fees Amounts

Wondering why FF believes 3 percent is too high? It is pretty simple. As of 2015, interchange fees have been capped at 0.3 percent of the transaction. And this cap applies to all countries in the EU.

That means, only 0.3 percent of the surcharge is compensating for the interchange fees. To be in compliance with the Consumer Rights Regulations, then the other 2.7 percent would need to cover expenses directly incurred from the processing of those transactions.

Additional Costs

While recognizing there are additional costs involved in the processing of credit card transactions is easy, the nature of those costs are often a mystery to regular consumers. Based on their research, FF believes that interchange fees represent the majority of the costs associated with the transactions.

So, if interchange fees are the majority, why are they charging another 2.7 percent? FF believes that the other expenses also total no more than 0.3 percent. That means the total amount charged should be no more than 0.6 percent; if you round up, then you are looking at 1 percent at most.

Total Surcharges on Airline Tickets

If you were going to book a trip from London to Madrid for Christmas (let’s say 22 December to 28 December), you could find roundtrip tickets for about £300. By paying for the flight with a credit card, you are subject to a 3 percent “convenience” fee, you would pay £9 for the right. If FF is correct, you should only pay around 1 percent. In this case, £3. That’s a difference of £6.

While £6 may not sound like much, that is the difference for a single ticket. For a family of four, that’s a total of £24.

Still, £24 doesn’t sound too bad by itself, but what if your tickets cost £600 each? Then, the difference between the fees is £48.

While reviewing the flight prices at a large flight aggregator, the website said that 715 people had book a flight from London to Madrid today. If every person was charged a 3 percent fee on a £300 ticket, then that comes out to £6,435 in surcharges alone. If those same people only paid a 1 percent fee, the total would be £2,145.

That’s a difference of £4,290 based on one flight route on just one day from one website. Over the course of a year, that £1,565,850 for that one flight route on one website. To find out the total amount made, you would have to determine the fee based on every flight route available.

If one flight route can generate a difference of over £1.5 million in a year, then that 2 percent fee difference sounds like a bigger deal than the £6 difference you may be paying. Now does that seem as reasonable as they make it out to be?


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