Airlines still demand mark ups of over 500% on credit card surcharges

Christmas is one of the busiest times of year for airlines as Australians fly home to see their loved ones yet a CHOICE review has found consumers are still facing excessive surcharges when they purchase flights using a credit card despite new rules designed to limit them.

Photo Credit: ~Oryctes~/Flickr

“Excessive surcharges continue to deliver a real sting in the tail for consumers, turning what looks like a festive bargain flight home into a costly Christmas rip-off,” says CHOICE CEO Alan Kirkland.

“The latest CHOICE review comes in the wake of Qantas announcing earlier this year that it would lower its surcharge from $7.70 to $7.00. This token reduction came following the introduction of new rules by the Reserve Bank of Australia requiring companies to limiting credit card surcharges to the reasonable costs processing payments.”

“It’s now 297 days since the Reserve Bank of Australia (RBA) rules came into effect and yet Cabcharge, Qantas, Virgin Australia, Jetstar and Tiger continue to hit Australians with millions more in surcharges than it costs to process these transactions.”

“Our latest review has found consumers flying Qantas from Sydney to Melbourne can still pay a staggering 523% more than the average merchant service fee, only a slight reduction from the 568% they were paying back in March.”

“It seems the airlines have built a business out of excessive surcharging and they seem happy to continue to fly in the face of RBA rules limiting surcharging to a reasonable level,” says Mr Kirkland.

RBA data shows the average fees paid by merchants to process Visa and Mastercard transactions are less than 1% so there should be no reason for consumers continue to be slugged by the airlines.

“Christmas should be a time for giving and yet the airlines continue to take from Australians with their hands firmly in consumers’ pockets.”

“The best Christmas message consumers could get this year would be from Qantas and the other airlines announcing they’ll stop their astronomical surcharging.”

A survey commissioned by CHOICE earlier this year found that close to half of Australians who reported paying a credit card surcharge say they were not offered or made aware of an alternative, surcharge-free payment method.

CHOICE is calling on Australians to ‘dob in a dodgy surcharge’ by going to and sharing examples of excessive credit card fees.