From surprise fees at the end of a transaction just for using your credit card, to unwanted overdrafts on your bank accounts, it can be all too easy to incur unexpected costs in day-to-day life.
That’s why this week we’ve acted to ban card-charges in the UK and give people more transparency and control over their financial decisions, putting consumers at the heart of the financial services revolution.
It’s always a nasty surprise when you get to the checkout and find yourself slapped with a fee just for using your credit card.
Almost all of us, including myself, will have unwittingly faced this unwelcome charge at the end of a purchase. Earlier this year, I was looking to book a flight to the Netherlands, which had been advertised as £24.99 with all “taxes, fees and charges included”.
And so I was shocked to reach the checkout page and find that I had to pay a minimum £5 fee to use my credit card — effectively a 20 per cent surcharge on my flight. Having gone through the whole process before being told about the card charges, this wasn’t exactly the cost transparency I was promised at the start of my search.
Advertisement
This might have only been one instance, but these small charges can really add up.
These rip-off fees for using your credit card are a reality for millions of people across the country, with businesses from takeaway apps to airlines charging just to pay by card.
In fact it is estimated that businesses charged people about £473 million just for using their plastic, based on the latest available figures.
These fees are outdated and unfair and that’s why, as part of new EU legislation, we are making them illegal and bringing card charging in the UK to an end.
On top of that, we’re going even further in this country and applying this ban to all cards including AmEx, PayPal, and apps such as Apple Pay.
Advertisement
From January business will no longer be able to charge consumers just for using their cards at checkout and will mean shoppers across the country will have a bit of extra hard earned cash left in pockets.
Alongside the surcharging ban, we’re also giving people the ability to take greater control over their money by creating a new regulatory regime for innovative fintech firms, who use technology to help make banking and payment easier.
These firms will transform the way people engage with their finances — from managing all bank accounts through one easy-to-use app, to helping consumers avoid unwanted overdrafts by making automatic payments between bank accounts when funds are running low.
The possibilities are endless.
We are putting people back at the heart of the financial services revolution and making sure they can access banking services tailored to meet their needs.
Advertisement
Stephen Barclay is economic secretary to the Treasury