Government bans credit card surcharges

Consumers will no longer have to face paying sky-high charges for using credit or debit cards to make purchases ranging from holidays to concert tickets, after the government announced a ban on businesses automatically adding excessive card charges.

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The Office of Fair Trading (OFT) has estimated that consumers have been hit with £300m in payment surcharges in one year alone when purchasing airline tickets, with the levy adding as much as £6 to a flight and 75p to the price of a cinema ticket.

Under the new regulations any surcharges are expected to be in line with processing fees, which can start from as little as 10p per transaction.

Jo Swinson, the Consumer Minister, said: “The practice of excessive payment surcharges has been ripping off consumers for far too long. They are fed up of thinking they will be paying a certain price for goods only to find out towards the end of the process that the final price is much higher.”

The decision comes after cash-strapped consumers’ growing dismay at costly credit card charges, with 50,000 people backing a campaign spearheaded by consumer champion Which? to bring an end to the credit card surcharges.

Richard Lloyd, the executive director of Which?, said: “For it to be effective there must be a tough enforcement regime and companies must play fair and not pass costs on to customers in other ways.

“We will be monitoring the ban closely and want people to tell us about surcharges they think are excessive.”

Measures to end the use of pre-ticked boxes for online purchases and to stop companies forcing existing customers to use premium-rate telephone are also set to come into effect by the summer of 2014.

To get the best interest rates and rewards on your credit card, you can compare credit cards with Propertywide.

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