New airline credit card surcharges: How much less will you pay?
For a typical airline fare, there's a major reduction.
From today, airlines (and any business earning more than $25 million a year) can no longer impose excessive surcharges for customers paying by credit card. That's good news for frequent flyers (count me guilty), but just how much difference will it make?
We've already reported the changes that have kicked in for Qantas, Virgin Australia, Jetstar and Tigerair. To set those in context, I set out to answer the question: what would the credit card surcharges have been prior to today for a $250 return domestic flight on each of those airlines, and what will they be from today?
Here's the answer:
| Airline | Old charge | New charge Visa | New charge Mastercard |
|---|---|---|---|
| Qantas | $7.00 | $3.25 | $3.25 |
| Virgin | $7.70 | $3.25 | $3.25 |
| Jetstar | $17.00 | $1.20 | $2.65 |
| Tigerair | $17.00 | $3.33 | $3.13 |
The biggest difference is for the low-cost carriers Jetstar and Tigerair, who previously charged a fee for each sector you booked. If you'd paid for this flight on Jetstar using a Visa card yesterday, it would have cost you more than 14 times as much as it will today. The differences are less apparent with Qantas and Virgin, but the cost is still less than half what it was.
To be clear, there are contexts where you might pay more. As I noted when Qantas announced its charges, customers on domestic flights that cost between $539 and $846 will pay a little more. For international flights, anything between $2,309 and $5,385 actually attracts slightly higher fares. But for domestic customers the news is good.
There are still tactics you can use to reduce the surcharges (debit cards are slightly cheaper on the bargain airlines) or reduce them altogether (paying using BPAY or POLi, or using an airline-issued credit card). That's worth doing when you can, but cutting fees in half or more is still a very welcome development.
Excuse me, I'm off to book some flights I've been holding off on . . .
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.
Picture: Shutterstock
