Surcharges: the firms that don't charge if you pay by card

As Cineworld ditches charges for paying by card, we highlight the other good guys that aren't cashing in when you pay with plastic.

Cinema chain Cineworld bucked the trend last week when it announced it was removing all booking fees paid when tickets were purchased with a credit or debit card online.

The firm, which operates 79 multiplex cinemas, previously charged customers between 70p and £4.20 to buy tickets online with a debit or credit card.

The move comes ahead of a Government ban on “excessive” surcharges for using a debit or credit card due to be introduced by the end of 2012. The clampdown follows an Office of Fair Trading investigation last year.

Currently if you book tickets for travel or entertainment online you are often charged extra when you tick the box that says you intend to pay by credit or debit card, with payment by credit card usually costing more. The fees cost us more than £300 million a year.

In many cases the costs are only brought to our attention at the last minute, for example when buying flights online. The OFT says this tactic makes it difficult for people to compare prices between different companies.

Under the plans, businesses will not be able to load on “excessive” payment surcharges. But they will be able to add a small charge to cover their real costs for using any particular form of payment.

Consumer groups have long been up in arms about card fees as they bear no relation to how much processing a card payment actually costs. According to the UK Cards Association processing a credit card payment costs between 1.5 and 3% of the transaction amount, but for debit card payments it’s a matter of pennies.

So who are the good guys and bad guys of card surcharges?

The good guys

Whether a firm charges extra for paying by credit or debit card or not seems to be dictated by which sector they are in.

For example, while it’s become the norm for airlines to charge card fees, the opposite is true if you travel by train. If you book tickets directly with Virgin Trains, SouthEastern Trains, or East Coast Trains there is no extra cost for paying by card.

It’s slightly different for websites that sell tickets from rail companies across the country though; cheap ticket portal redspottedhanky.com is surcharge free, as ss the National Rail website. However thetrainline.com charges £3.50 per booking if you pay by card.

Meanwhile travel agent Trailfinders bucks the trend in the travel industry by not imposing card fees, as does helpmetravel.co.uk which compares airport parking operators.

If you fancy a day out in the capital it’s possible to book tickets directly with some attractions without paying a card fee. The London Eye, Madame Tussauds and Legoland don’t charge online customers for card payments, for example.

Most health and beauty sites including chemistdirect.co.uk and lookfantastic.com don’t charge for debit and credit card payments either.

Companies to avoid

Cineworld is the first cinema chain to drop card fees for online bookings. Rival Odeon Cinemas imposes a credit card fee of 75p per ticket to a maximum of £4.50 per booking, while Vue Cinemas charges 75p per ticket whether you pay by debit or credit card.

Budget airlines are some of the main culprits when it comes to excessive card fees. Ryanair, for example, charges an ‘administration fee’ of £6 per customer per flight, meaning a family of four will pay £48 in fees for return flights. Rival Easyjet charges £9 per booking plus 2.5%.

British Airways charges less than its budget counterparts, but still £4.50 per booking if you pay by credit card.

Even the DVLA and some councils hit the public and boost their finances with card fees for some services. For example, the DVLA charges £2.50 if you buy your car tax online.

Holiday and travel companies also use card surcharges as a way to bump up their profits; Eurostar charges £4 per booking and Mark Warner 2% on credit card bookings - so that’s £20 on a £1,000 holiday.

What’s even more annoying is that many people prefer to pay for holidays by credit card because of the extra protection purchases get under Section 75 of the Consumer Credit Act. This clause means you’ll get your money back if the holiday firm goes bust.

One of the most outrageous card fees is charged by estate agent Foxtons which charges £25 if tenants pay a rental deposit by credit card. Equally flabbergasting is the 12.5% Dial-a-Cab taxis charges if you pay a fare with a debit or credit card – that’s £3.75 on a £30 cab fare.

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