Card fee trick exposed
THE most annoying thing about being charged extra to pay by credit card is discovering this nasty little surprise at the checkout.
It’s a kick in the teeth after hours shopping around for a holiday deal or car cover.
Whether the 3 pc surcharge works out at £5 or £50 extra, you feel lured in under false pretences. And yet, with your card at the ready, it’s too much hassle to cancel and start again.
The alternative — paying by debit card — is too risky these days for online shopping. Should a fraudster steal your identity and start splurging, you can simply refuse to pay a credit card bill.
Not so with a debit card, where you rely on your bank to cover the theft. And thanks to so-called Section 75 rules on credit cards, it’s easier to claim a refund if your order is faulty, goes missing in the post or you get shoddy service.
The shameless firms imposing this surcharge on customers know it’s been branded a rip-off by ministers and it will be banned in January. Yet dozens are still at it, trotting out excuses along the lines of: ‘We don’t make a profit from the fees because banks impose high costs on all retailers for processing credit card payments.’
Money Mail understands these costs rarely go above £1.50 per £100 spent on a credit card. We also understand that it doesn’t cost an awful lot less to process a debit card payment. So why charge £3 for one, and nothing for the other?
It looks even more suspicious when the likes of John Lewis and Amazon don’t impose a surcharge at all.
They face the same costs but see these an unavoidable part of doing business. After all, you wouldn’t expect to pay a separate fee for printing the receipt, and if the company can find a bank to process card payments cheaply, everyone’s a winner.
I can see only two reasons to charge extra for credit card payments. One is to rake in extra cash on the sly, which the companies deny.
The other is to make headline prices seem cheaper than they really are for customers who take precautions when shopping online, in the vain hope that we’ll give up our credit card protections and switch to a debit card at the checkout. If that’s the real reason, it’s chicanery at its worst.
Buyers’ bond?
DON’T count on it, but if Chancellor Philip Hammond manages to summon up courage in his Budget today, he could do worse than launch a housing bond for savers.
Nobody who owns a home wants prices to crash, yet they’re rising out of reach of young buyers. The only solution is to build more affordable houses.
To fund the housebuilding drive, the Chancellor should turn to National Savings & Investments (which has led the way in passing on the rate rise to savers).
Despite the Bank of England base rate hike this month, savers face an income crisis caused by years of record-low returns.
If NS&I launched a housing bond with a return linked to inflation, savers would ditch the big banks and pour in cash that the Treasury could use for building projects. A housing bond to help both young and old in one fell swoop — that’s what I call a real Budget winner.
Stamp out tax
WHAT else should we expect from Mr Hammond today? My sources say he’s had boffins at HM Revenue & Customers crunching numbers on how cuts to stamp duty south of the Border might work. About time. This objectionable tax is putting off first-time buyers and discouraging the old from downsizing. Short of getting rid of it altogether, Mr Hammond should suspend it for these two groups.
Endowment slip
LAST week I wrote that homeowners paying £50 a week into endowment policies had been disgracefully let down by the insurers who sold the deals. That, of course, should have read £50 a month. I am grateful to John Carr, an endowment scandal victim, for pointing this out. If you’ve been failed by an endowment let me know.