Cashing in on credit

Financial Adviser

At a time when interest rates are historically low, when there is a national drive towards greater savings, some high street banks, top-end restaurants and even corner shops are imposing charges on customers for a wide range of purchases.

Like most things, few people complain, seeing the charges as an inconvenience; but as we move more towards a cashless society these charges are the price we all pay for going around with bits of plastic in our wallets.

One of the biggest scandals is that of BA, which charges £5 a ticket, even if payment is by a single transaction and even if the traveller is going to Sydney or Edinburgh.

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When challenged as to why this is so, BA comes out with it pre-prepared statement about having to pay a fee, which it did not disclose, to the card providers.

But, with modern technology, the fee per transaction for BA must certainly be the same for the local corner shop which charges 50p.

The disparities are too wide, from nothing with contactless cards, to 50 pence per purchase in a convenience store, to two per cent at some currency exchange bureaux to £5 per item with BA, even if it is a single transaction.

Neither the individual companies nor the UK Card Association has given any rational explanation of the charge and ordinary consumers are forced to draw their own conclusions that these companies see charging for the use of debit and credit cards as another income stream. In an age of greater transparency all charges must be fully explained, no matter how small and basic they may be.

Equally, the City regulator cannot escape some responsibility; the FCA must fire a shot across the bows of these banks and non-bank financial institutions warning them that the days of easy money are over.

This is another example of consumers being taken for a ride.