Credit Card Extras

People are getting increasingly annoyed by the devious way in which some firms are charging for the used of credit cards. It's not just the cost cutting airlines, but travel agents and government departments that are getting on their customers nerves.

These charges are known as merchant or handling fees, but whatever they want to call them, they are extra charges. Consumer groups claim that they are not in proportion to the actual costs incurred in relation to the transaction.

The fees charged to companies (merchant fees) are up to one per cent. The fees charged to their customers can be considerably higher. In some cases there is no alternative to paying by card and yet in the case of one of the cheap airlines the charge is currently 4.75 pounds per passenger per single flight. The flight cost could quite reasonably be around sixty pounds and therefore the airlines costs would be around 60 pence. This is clearly just fudging the figures and the fair way to show them is as a booking fee. In some cases you're not even aware of this charge until you'reach the end of the booking process.

There are millions of small firm all over the UK who take credit cards and wouldn't dream of making any charge whatsoever to their customers. It's not just the airlines and travel industry that impose these charges. The DVLA (Driving and Licensing Agency) imposes an extra charge for vehicle tax and licensing costs. This flat fee means that two types of their customers suffer more than others the ones that, for whatever reason, but probably cost, wish to tax their car for six months at a time and those who have deliberately chosen lower emission vehicles.

A DVLA spokesman said The charge for using credit cards for on line relicensing transactions is calculated to cover the costs of providing this payment option. This includes increased operating costs for DVLA as well as the credit card company charges. Without levying the charge the DVLA would not be able to offer the credit card as a method of payment. Nevertheless, customers can use the DVLA online relicensing system without incurring an additional charge by using a debit card.

The payment body APACS is clear on the acceptance of card transactions for businesses. Businesses pay an agreed percentage of the total transaction for the use of credit cards and a standard flat rate for debit cards. The fee is based on an agreement between the dealer and their bank and varies for different types of businesses. Fees for on line retailers would be different to those paid by a high street business, for example.

Large companies will naturally process many more transactions than smaller firms and are in a position to negotiate a far more competitive rate than a small retailer in a typical high street shop. It's up to the retailer to charge the customer whatever their administration costs are but it would be but most people would agree that they would like that charge to be shown openly and without any doubt that it is, in fact, an additional charge to be paid to the supplier of the services or goods.