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Creditfix LB 03-2017

UK to Ban Debit and Credit Card Surcharges

Debit and credit card surcharges will be banned in the UK from January 1st next year under new rules announced by the government last week.

The government found that many consumers making purchases in the UK are being asked to pay up to 20 percent more on their bills, such as for flights, for using a card rather than cash. The ban on card surcharges will also apply to all government agencies.

Economic Secretary to the Treasury, Stephen Barclay, said: ‘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.’

He continued: ‘These small charges can really add up and this change will mean shoppers across the country have that bit of extra cash to spend on the things that matter to them.’

Treasury figures from as long ago as 2010 show that the total value of surcharges for debit and credit cards was estimated at 473 million pounds.

Britain’s economy has recently been shown to be slowing as high inflation and low wage growth cuts consumer spending and raises household debt.

The Treasury said: ‘This action forms part of our wider help for families with the cost of living by helping to raise their incomes and keep more of what they earn.’

The government also stated that it will look at doing more to limit the costs of processing payments that credit card companies impose on retailers.

Managing editor at MoneySavingExpert, Guy Anker, commented: ‘With many feeling the squeeze in the cost of living, people shouldn’t be hit with unexpected fees.’

However, referring to the fact that fees will still be charged by card companies to retailers, Mr Anker went on to say: ‘We expect some companies will raise prices for all to compensate for the loss, which could hit those who currently pay in cash.’

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