Government to end rip-off card charges
July 26, 2017
The government has announced the end to the rip-off card charges that can hit consumers across the UK.
Ministers have unveiled new rules that will abolish a range of extra charges that credit card providers slap on transactions, such as up to 20 per cent extra for purchases like flights.
It said the practice of surcharging has become commonplace when providers of goods and services force people to pay extra for using their cards for services like PayPal, but this will now end.
The changes will be happening because of the new EU Payment Services directive. Although Britain is leaving the EU, it is still bound by its rules until Brexit takes effect in March 2019 and the legislation is being fully implemented.
Discussing the law change, economic secretary to the Treasury Stephen Barclay said: "Rip-off charges have no place in a modern Britain and that’s why card charging in Britain is about to come to an end.
"This is about fairness and transparency, and so from next year, there will be no more nasty surprises for people at the check-out just for using a card."
While the surcharges may make using cards cheaper, those planning to make purchases using a new credit card should still look around for the best deals.
In particular, those using a card can benefit from a good introductory interest-free period, which means much or all of the balance built up from making a large purchase can be paid off by the time this expires.
However, it may be wise to also check the rate the card will revert to afterwards, particularly if it is likely that some balance will still be outstanding by then.
Credit cards are a popular way to pay for goods and services as existing consumer credit law means there is more protection for buyers if the goods and services they pay for are not provided, such as if a flight is booked and the airline then goes bust.
This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.