The Office of Fair Trading has recently announced it will be investigating the nature of credit card transaction fees charged by retailers and banks.
The advent of the credit card has gone a long way towards simplifying life for many consumers in the UK. The benefits of using a credit card include having the purchasing flexibility in making repayments on large purchases, and both credit and debit cards both free a consumer from having to carry around large sums of cash in order to make transactions. Even more enjoy the ability to easily purchase goods and services over the Internet or the telephone.
All this accessibility has not come without a price, however. One fly in the ointment has been that many companies and retailers charge administrative fees for card transactions which can result in a significant increase in the cost of a purchase.
A great many cardholders have purchased something using credit only to find that they are now subject to a large administrative charge on top of the price of the item they are actually buying – something they wouldn’t be subject to if they were using cash.
One travel site official recently commented that a high number of travel providers are passing on bank charges to their customers. The official added that some are even increasing these charges to turn some additional profit, a trend that has begun to spread to debit card purchases as well.
The consumer campaign organisation Which? recently launched a super-complaint against all these various fees and surcharges. In response the Office of Fair Trading has now decided to look into the fees in question, which could result in companies being told to reduce their administration charges for debit and credit card purchases.