Customer Service

Pros & Cons Of The EU’s Credit Card Rule Change

It’s recently been announced that the EU are making a big change to the way holidaymakers are charged when booking trips away, whether that be abroad or here in the United Kingdom.

But what does this mean for people looking to head off for that much-needed break? How might you be impacted and what are the plus points and potential downsides? All is revealed here…

What rule change has been made?

As of Saturday 13th January, travel companies can no longer charge customers for paying via credit or debit card. This applies to payments for any goods or services, including things like airport parking or the actual holiday itself.

Why has this change been brought in?

It has been introduced in an attempt to decrease the price of booking a holiday for consumers and to prevent companies from penalising or gaining profit from those who wish to make card payments.

I booked my holiday last year but still need to pay some of the remaining balance. Will I be charged for using a credit card?

The ban impacts all bookings made after 18th July 2017 and payments made after 13th January 2018. This means that if you booked before 18th July 2017, a charge can still be imposed for paying by card. However the new rule states that customers cannot be charged extra for paying any remaining balance by card on holidays booked after 13th January 2018.

So I can’t be charged any extra at all when booking my holiday?

You might still be charged a general booking or administration fee, but this cannot be linked to the way you are making a payment. It’s also worth noting that you could still be charged extra when paying with a business credit or business debit card.

What other positives has this resulted in for holidaymakers?

Consumers can take advantage of deferring their holiday cost, without worrying about any extra charges this might involve from the booking agent, as well as benefiting from the protection credit cards offer. For example, refunds are obligatory should the airline or travel company your holiday is booked with goes out of business.

This sounds great. Are there any downsides?

The change has been met with fury by some in the travel industry, who claim it may be necessary to up the cost of holidays in order to make back the charge that is enforced upon them by banks for processing credit card payments, typically 2%.

It is also argued that the rule could force smaller companies to liquidate or simply start charging administration fees for all bookings. If this happens, it’s reasonable to think those who usually pay upfront in cash or by direct bank transfer will be losing out more than most.

Could the rule be overturned?

The change has been enforced by the EU, so could possibly be reversed post-Brexit. It’s best not to assume that all companies have immediately complied with the new rule however, as recently suggested by The Money Saving Expert, so always check to make sure a fee hasn’t been added for any travel payments in the coming days and weeks ahead.

I think I might have been wrongly charged. What are my options?

If you have been asked to pay a fee for using a card or incorrectly charged, check if the company is aware of the new ruling relating to this. If they still persist, inform local trading standards.