Travel booking may now become cheaper following a UK Government ban on the excessive surcharges for buying by debit and credit cards.

As you would have noticed the last time you booked a flight, show ticket, or even a train ticket, there is usually a surcharge for using your credit card and even your debit card. Ryanair charge £6 for credit or debit card purchases but add an extra admin fee of £6 on top of that. Easyjet charge an outrageous £12.95 for credit card bookings while even debit card payments are £8. BMIBaby seem to be taking a back-marker position by charging £10 and £7 respectively.

Customers booking Ryanair don’t actually find out how much the credit card charge is for Ryanair until after they’ve paid – it’s not even mentioned in their terms and conditions - and the charge is per person. The problem is, Ryanair consider it an "administrative charge" rather than a credit card charge, which may lead other airlines to follow with this tactic to avoid the law.

Eurostar charge a more modest £4 for credit card bookings but nothing at all for debit cards.

Why are these charges this outrageous? Well because a few years ago this surcharge was applied to cover costs the card companies impose on vendors, which for credit cards is between 1.5 and 5% depending on the nature of the purchase. Large vendors who generate huge volumes of payments can usually negotiate this cost down to 1.5% as is the case with the low cost airlines. Debit cards are charged at a much lower rate by the bank’s merchant services – usually about 10p. So, in effect, everything the airlines charge on top of that is pure profit, in Easyjet’s case £7.90 for debit cards.

The UK Government have used the term “excessive charges” to create greater transparency over what purchasers are paying to prevent the likes of low-cost airlines to take advantage of unsuspecting consumers lured by what seem to low fares. The UK will be the first country to use this EU legislation preventing hidden charges. 

Gary Phillips

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