£125 credit card charge!?!?!

sandford6016

Hi,

So I need to pay the balance of our skiing holiday this week to Inghams holidays. I want to pay this with a credit card so I have some form of protection incase they go bust and all that sort of stuff. The remaining balance is £5000, and they want to take a 2.5% charge for paying with a credit card; £125!!! 3% (£150) if I want to use AMEX!

Surely this can't be allowed?! I can't believe it costs them £125 to process my payment?!

Any advice?

cifpower

It is allowed. Merchants have to pay a fee of around 2% for a Visa credit card and higher for Amex

SimbaSimon

As per cifpower it is allowed.

The key is to pay only part of the balance on a credit card, the rest on debit/cheque. That way your covered for the whole thing and avoiding a lot of fees!

Paul_Herring

Surely this can't be allowed?! I can't believe it costs them £125 to process my payment?!

Of course it's allowed.

Amex charge retailers up to 5% of the transaction amount, so yes it is allowed.

The reason places like supermarkets don't make this charge, is that they increase their prices such that credit card charges are spread across *everyones* bills.

Yes, even if you pay cash, part of your total goes towards paying Amex, Visa and Mastercard's charges.

Only a few retailers (travel agents, car sellers) don't do this, and simply charge only those who use a credit card.

If it's Section 75 protection you're after, you don't need to pay the whole lot on your credit card, as long as /some/ of it has been paid, you should be covered.

mystic_trev

I can't see what the problem is? Pay by debit card - Inghams are covered by ABTA.

dzug1

sandford6016 wrote: »

Hi,

So I need to pay the balance of our skiing holiday this week to Inghams holidays. I want to pay this with a credit card so I have some form of protection incase they go bust and all that sort of stuff. The remaining balance is £5000, and they want to take a 2.5% charge for paying with a credit card; £125!!! 3% (£150) if I want to use AMEX!

Surely this can't be allowed?! I can't believe it costs them £125 to process my payment?!

Any advice?

Yes it DOES cost them £125 or thereabouts to process the payment. Start believing it fast. How do you think the CC companies cover their costs from those who pay off in full and don't pay any interest? From the fees the retailer pays them.

negg

My little business used to get charged 6% per transaction for AMEX. That would be £300 for your £5000 transaction. Visa/Mastercard were around 3.5% so if you paid by AMEX to my business that amount, the cost (oddly enough) would be £125. Maybe they are using the same processor that I used to?

AMEX charge very high rates for processing transactions, hence the reason why many merchants won't accept them. Also the reason why you can get higher cashback from them.

dazza.mk

SimbaK2K wrote: »

As per cifpower it is allowed.

The key is to pay only part of the balance on a credit card, the rest on debit/cheque. That way your covered for the whole thing and avoiding a lot of fees!

As SimbaK2K,

Pay £1 on your creidt card and you are still covered for the full value, the key per the legislation is that the item has got to cost £100 - £30,0000, not that you have to pay allof it on your credit card.

BigDave81

dazza.mk wrote: »

As SimbaK2K,

Pay £1 on your creidt card and you are still covered for the full value, the key per the legislation is that the item has got to cost £100 - £30,0000, not that you have to pay allof it on your credit card.

So surely you would need to pay £100 or more then, not just £1

Paul_Herring

BigDave81 wrote: »

So surely you would need to pay £100 or more then, not just £1

The rules as stated is that the item in question must cost between £100 and £30,000, not that that should be the amount placed on the card. (The reasoning being - think deposit by credit card, balance by debit card - you're still covered.) Though I suspect you'll get a funny look if you try to only pay £1 by credit card.

Going to the other end of the scale, if you pay £30,000 on a credit card for a purchase that costs more than that, you aren't covered.

dazza.mk

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/62/62-consumer-credit.htm

The criteria for establishing the lender-borrower-supplier chain as mentioned is purely based on the value of the item and the fact that credit was used to purchase the item, not how much was actually paid on creidt.