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Hidden card charges exposed by Which? Money

01. Oct, 2010 Categories: Business Bank Account Updates, News by Business Bank Accounts 0 Comments

Consumer advocacy organisation Which? Money recently released new research findings detailing how purchasing by debit or credit card can result in cost increases of up to 200 per cent.

Which? Money has been conducting a study for quite some time in its, aim to document the types of hidden charges and the frequency in which they are attached to credit or debit card purchases of cinema, trains, and airline tickets, either as some percentage of the total cost or as a flat fee in addition to the purchase price.

Which? gave several examples of the practise; a Saga cruise, which retails at £19,000, would result in surcharges being attached to the final purchase price totaling £470 if pair for by card, and travel agent thetrainline.com attaches a fee of £3.50, well above and beyond the price of a £1.70 ticket if a card is used in the purchase.

While many retailers will assign the blame for the fees on exorbitant card processing costs if questioned on their policies, Which? Money discovered a different collection of facts altogether; the typical merchant service fee a business bank account will be charged for card transactions is approximately 0.8 per cent of the total for a credit card and a paltry 0.1p for a debit card purchase.

The consumer group’s research additionally revealed that extra card fees most often appeared in the travel sector, as some airlines will will not charge one fee per transaction but one per item purchased, though banks will typically treat a return ticket as a single transaction.

Peter Vicary-Smith, chief executive for Which?, stated that since retailers seem to be using them to simply ramp up the cost of goods and services, high card fees can simply not be justified, adding that while companies may feel the need to recoup any merchant fees they pay on card transactions, customers suffer if they are not made aware of the total price of a transaction if the charges lack transparency and fairness.

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Tags: Business Bank Account Updates, credit card, debit card