Airline credit card fees: Unfair or reasonable?

credit-card-fees

Greedy airline credit card fees have long been a pet peeve of frequent flyers. But our members were particularly bemused when Qantas claimed recently that the $8.50 “Booking and Service fee” imposed by low-cost offshoot Jetstar is not actually a credit card fee. Instead, a Qantas spokesperson described the fee as a “comfort” charge.

Many of our members are unimpressed and see through what they consider to be nothing more than spin. Firstly, they believe that exorbitant credit card fees are unfair because they do not accurately reflect the cost of the transaction for the airline. Secondly, some members consider the name “Booking and service charge” misleading. Thirdly, they question the airline’s motivation in saying that a fee charged to customers for card payments is not a credit card fee.

Some of our members have taken the side of Qantas and Jetstar on this issue. Firstly, they point out that in some cases the credit card fee does not fully recover the cost of the transaction and that overall, Qantas does not actually make any money from these surcharges. Secondly, one member opines that it is reasonable to charge for the “convenience” of being able to pay at home with a credit card.

Exorbitant credit card surcharges are nothing new, and Qantas is by no means the only airline to engage in this practice. In one extreme case, it was recently reported on AFF that Virgin Australia insisted on charging a $30 credit card fee on top of a cancellation fee of just $60. Ignoring the fact that a credit card fee was charged on top of a fee, the cost of the surcharge was a whopping 50% of the transaction amount in this case!

Attempts have been made by the RBA to regulate price gouging related to credit card fees. Despite such attempts, the airlines don’t seem to be coming to the party. Instead of lowering their credit card fees, the airlines have attempted to get around the new rules by calling the fees something else. Though each airline does (as required by law) continue to offer at least one fee-free payment option.

In the meantime, our savvy members have discovered a few ways to avoid paying credit card fees to airlines. For Qantas, this means paying by BPAY and Virgin and Jetstar offer POLi for fee-free payments. Tiger Airways doesn’t levy a surcharge for MasterCard debit card payments. There is also a loophole whereby Qantas customers can avoid all credit card fees by paying with a voucher.

Share your views HERE.

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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]