Any credit comes at a price and credit cards charge twice – both the owner and retailer pay fees.
Until recently it’s been relatively rare for retailers to charge more for sales by credit card although discounts for cash weren’t uncommon.
Now more retailers are imposing a surcharge on credit cards:
Banking ombudsman Deborah Battell says “charging a fee for using a credit card is becoming a lot more common and so we do see complaints about this kind of issue”.
Meanwhile Consumer NZ chief executive Sue Chetwin says “retailers are seeing this as an opportunity to up the value of what they’re actually selling”.
Using a credit card to shop online for flights with Air New Zealand will incur $7 for a return flight. Many service stations now charge a service fee and even paying council rates online can attract a fee of nearly 3 percent.
If retailers don’t make the user pay they or other customers are subsidising the card users.
However, if the surcharge is greater than the fees the retailer pays it goes beyond cost recovery and buyers need to beware.
However, sometimes, even with the charge it can still be a good deal.
Our travel agent imposes a surcharge on credit card payments but if we use the card for at least half any pre-paid travel costs we get free insurance.
Last time we did bookings we balked at the credit card charge, paid by internet banking then found that buying insurance cost about twice what the fees would have.
Homepaddock 
Until recently it’s been relatively rare for retailers to charge more for sales by credit card although discounts for cash weren’t uncommon.
Actually, it was illegal. And that’s why dairies frequently refused credit cards – because it cost them more but they couldn’t charge more.
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`Last time we did bookings we balked at the credit card charge, paid by internet banking then found that buying insurance cost about twice what the fees would have.’
You possibly got better cover though. There are a number of horror stories about people being let down by Credit Card Insurance providers when the crunch has come.
I recommend Comprehensive Travel Insurance Co. which is part of the Vero Group – fair premiums and top class claims service.
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We pay travel by direct debit, and still retain our free insurance.
Our bank accepts this if the travel provider does not have a wholesale arm that accepts credit card payment.
Our claims experience so far has been hassle free.
Just make sure you contact the banks insurer directly and ask for the up to date policy, and ask what the exceptions are. Write them down, as well as the persons name and the time and date of the call.
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