extra charge for paying with credit card

rifalda

I'm surprised that many business have started to charge you directly when you pay with your credit card. Is this legal? We're already paying for the card and also the interest when you pay montly, so why do we have to pay extra?
do you know if we can complain against these establisments? and I'm not talking only the shop at the corner, I'm talking companies like IKEA for example.

Mark7799

rifalda wrote: »

I'm surprised that many business have started to charge you directly when you pay with your credit card. Is this legal? We're already paying for the card and also the interest when you pay montly, so why do we have to pay extra?
do you know if we can complain against these establisments? and I'm not talking only the shop at the corner, I'm talking companies like IKEA for example.

Which cards do you have to pay for? Pay the bill off in full and the card costs nothing to you.

Complain directly to the establishments - it's up to them what they want to charge (or shop somewhere that doesn't charge for card payments:D )

masonic

There are two methods retailers use when dealing with cards that the retailer has to pay a premium to use:

1) Factor an extra percentage into everyones bill through their base prices (supermarkets, for example, tend to do this)
2) Just charge the people who use those cards

Either way, you pay. Not using a credit card, and using a retailer who adds a surcharge is the only way to avoid subsidising the credit card companies.

stsinfield

I recently booked a holiday with Jet2 online and was charged £20 because I paid by Credit Card despite that at no stage of the booking was there any indication that there would be such a charge. It was only after confirming the booking that I discovered I had been charged.

Labman_2

rifalda wrote: »

I'm surprised that many business have started to charge you directly when you pay with your credit card. Is this legal?

Not a recent thing....long been the case in the travel industry I'm afraid. Yes it's legal. What you pay in interest (or not) is of absolutely no concern to Ikea or any other retailer....it costs retailers extra to accept CC....so they pass the costs on. Seems fair to me

YorkshireBoy

stsinfield wrote: »

I recently booked a holiday with Jet2 online and was charged £20 because I paid by Credit Card despite that at no stage of the booking was there any indication that there would be such a charge. It was only after confirming the booking that I discovered I had been charged.

At step 5 of 5, and before you enter your card details, you're asked to accept the charge of "£1.75 per passenger per sector" for paying by credit card - which is then conveniently totalled up and presented to you in a message box and which you have to click "OK" on.

Is this a recent change, or did you simply not read the message?

stsinfield

I booked the holiday online through jet2holidays and when the total charge was shown it mentioned a credit card fee with no figure so I assumed that there was no charge. I have rechecked and this is the case. I would have thought that if there was a charge it would be shown

YorkshireBoy

stsinfield wrote: »

I booked the holiday online through jet2holidays and when the total charge was shown it mentioned a credit card fee with no figure so I assumed that there was no charge. I have rechecked and this is the case. I would have thought that if there was a charge it would be shown

I see what's happened now. Unlike their flight booking site (as I mentioned above) if you select 'credit card' on the jet2holidays site, then the credit card charge field is completed with the applicable fee - relying on it catching your eye and you noticing the overall price has changed.

Hmmm, I've seen better presentation of credit card charges.

MickKnipfler

If they offered you a discount for cash or debit card, would that be more palletable?

dunstonh

This was introduced back in the late 80s/early 90s. Initially they could only charge extra for credit cards but not debit cards. I dont know if that exception still exists or not.

student100

The reason for charges is that retailers pay credit card processing fees as a percentage of the total bill (varies depending on the company, but something like 1-3% is probably likely) whereas debit card processing is charged at a flat rate (20-60p or that rough ballpark).

So if you spend £200 then by credit card it might cost them £4 to process versus 40p for debit card.

Due to the "low frills" policy of places like Ikea, and the fact that their average spend per shop is quite high, they've introduced charges for credit cards but not debit cards.

In other places like supermarkets, the average spend probably varies considerably. If you only spend £20 in one go then there's probably no difference in cost to Tesco between processing credit and debit card payments. Spend say £10 and the credit card is actually the cheaper option. So supermarkets haven't thought it worthwhile to put fees in place for credit cards.


Ultimately it's up to the consumer to factor in the card fees when deciding where to shop and how to pay. If you're buying £500 of furniture in Ikea then the interest free period and 1% cashback on a credit card will easily outweigh the 75p card fee. For an Easyjet flight perhaps paying by debit card will be most effective.


It's also worth remembering that taking cash payment has a cost involved (someone to count it, risk of theft, Securicor collections etc), so cash payers probably cost shops just as much as those paying by card. And antiquated payment methods like cheques are so expensive to process that even places like Sainsburys are phasing them out now.