Credit Card Fees Will Be Banned From January 2018

By Ian Morris on at

From January next year credit card fees will be banned in the UK. These small charges are the ones levied by retailers to compensate for the costs of banking, not the ones card companies charge merchants to provide banking services. Not all companies will pass this charge on - for example, your supermarket probably doesn't - but from 2018 no company will be able to add a surcharge for paying by credit card.

The bad news, of course, is that consumers usually end up having to make up any shortfall through higher charges. This probably means that cinema tickets, gig bookings and festival prices will all increase to cover the shortfall, and probably by more than the companies lost.

Interestingly, Ars Technica points out that the DVLA will be one such firm that loses money on this. Each driving licence renewal by credit card costs £2.50 in fees alone. This may well mean that renewals jump in price for everyone, even those paying by debit card. Other government branches named by Ars include local councils and HMRC. Of course, many people will pay these charges with bank transfers or debit cards, so the actual lost revenue may be small.

The big problem for small retailers will be that they have previously covered expensive merchant fees by adding on a small charge for card payments. This will become illegal, so instead, they'll have to raise their prices on products which might hamper their ability to compete with big firms that can more easily absorb the costs.

Anyway, it's largely good news but when you get to middle age you start to see through the good news and discover the hidden misery within. [via Ars Technica]

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