The Association of Independent Tour Operators, a UK-based travel association, has reported that premium credit cards may turn out to be expensive for travellers.
A report published by the association says that some cards attract higher transaction fees than their pre-contracted rates, resulting in a cost increase of around 1 percent when goods are purchased with the cards.
Around 30 percent of UK travellers use credit cards to purchase goods and services on holiday. Association members have reported an additional GBP600,000 per annum charges on certain cards over and above costs already charged by credit card merchant companies. These are premium credit cards offered by the banks, with a range of extra benefits.
The association chairman, Derek Moore, said, ‘We’ve done some digging, and discovered that this extra cost is down to premium credit cards. Incredibly, businesses cannot tell, when a consumer pays for a purchase by credit card, if it’s a normal or a premium credit card. Neither do businesses know until they receive their credit card bills what each bank’s merchant acquirer is going to charge them, i.e., the normal pre-contracted 1.5 percent to 2 percent fee or a fee of up to 3 percent. These are effectively stealth charges, and are as iniquitous as a stealth tax.
We – and, importantly, consumers – need to know at the point of sale what the card charge to the business will be. Our members can then levy a fair charge on the consumer to cover the additional costs. And of course, armed with this information, consumers can choose to pay with cards that incur lower charges or, alternatively, by low-cost methods such as bank transfer, debit card or cheque. ATOL and other Government-approved financial protection schemes, to which all AITO members subscribe, mean that there’s full financial protection in place however payment is made. Transparency is, we believe, essential. It’s both good for business and good for the consumer.’
