Can you be charged extra for paying with your credit card?
1st May 2016
You want to make sure you can get your money back if you book a holiday and anything goes wrong – after all, you don’t want to throw away your cash. That’s why you might book your flights or hotel with your credit card. Using a credit card can give you extra protection, but what do you do if there’s an extra charge for this?
Some airlines or hotel websites charge you for paying with your credit card rather than your debit card. So does this mean you should use your debit card instead and lose the extra protection? Let’s take a look.
Paying the price
Back in November 2015, the rules around interchange fees changed. These are the fees card providers charge retailers for putting through payments. Interchange fees can now be a maximum of 0.2% of the transaction value for debit cards and 0.3% for credit cards. You can find out more about interchange fees and how the rules changed in our blog.
But some retailers still charge more for credit card payments and they can do this. According to Which?, credit card charges shouldn’t be excessive and companies shouldn’t charge any more than it costs them. If you think a company is charging too much when you pay by credit card, you can report them to Trading Standards.
Weigh it up
But if you’ll pay more when you use your credit card, should you pay with your debit card instead? Not if you want Section 75 protection. If there’s anything wrong with something you’ve bought or it doesn’t turn up, you can claim the money back from the retailer or the credit card provider.
As long as what you’re buying costs between £100 and £30,000, you’re covered – and it’s the main reason why some people make high value purchases with their credit card.
If you want the protection of Section 75 when you pay for your holiday but you don’t want any extra fees, find out how much it will cost. You might decide it’s worth an extra couple of quid for the peace of mind – that way, you know your hotel or flights are covered if something goes wrong with your holiday. But your hotel stay is relatively low-value, you might decide the credit card fee isn’t worth it – and if it costs less than £100, Section 75 won’t cover it anyway.
You could also check what your travel insurance covers. You might find that your insurer would pay out if your hotel or airline went bust, so you might not need Section 75 protection. But not all travel insurance policies will cover you for this – that’s why you should check the details of your policy really carefully to see what’s included.
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