High surcharge for paying by credit card

When I phoned Viking to pay the final outstanding amount for our trip I was told it would cost me 2.5% extra for using a credit card. As it was for a large amount the extra charge would have been very significant. I wanted to pay by credit card for the extra insurance. (I buy a lot online and frequently use my credit card for this.)When I queried it I was told that "the credit card companies"-none named- all charged Viking 5% which Viking split with the customer hence the 2.5% charge. On discussion with DH he said that his business is much much smaller than Viking and the credit card companies only charge him 1.5% which he does not pass on to the customers. Its hard to believe that a huge enterprise like Viking cannot cut a better deal with these credit card companies. I know that there is concern about this over here and I think the Office of Fair Trading is concerned about this sort of thing.

It does leave me thinking the worse of Viking - and paying by cheque which will be time and labour consuming and cause Viking a delay in getting their money. Do others have any thoughts on this?

This sounds typical for Viking, with surcharges to nickel and dime you, phony twofer deals, payment in full long before departure, etc.

Maybe is a UK thing. They did not charge me anything extra for using CC (I am in Canada)

I am in the US and Viking did not charge anything for me using my credit card. Also, I have had some good deals from Viking and the past traveler credit helps too. I find Viking very competitively priced and have been on Avalon and Gate 1.

Ironically where I work we are implementing a charge for using your credit card on Monday. I work at a Post Secondary Institute in Canada and apparently the savings will be over 1.5 millions $$. As the credit card companies keep racking up more and more fees this might become a more common occurance. Not saying I like it and I do like to pay by credit card for cruises and other large items. :(

Is this surcharge really coming directly from Viking or is it the TA or a such trying to pass bank charges on to customers. For a company like Viking the use of Credit Cards is a normal expected cost of doing business and their cruise fares are priced accordingly. I suspect this may not be a Vikng thing but a Travel consultant doing this???

Anyone else in US, Canada or Europe have this experience??

That seems odd that Viking would be charging for using a credit/debit card in your situation.

I work in a public institution. We use an outside vendor for customers that want to pay a bill by credit/debit card. We use the vendor because we don't want to have taxpayers absorb the 2.75% cost of the transaction. (And many times the customer is just using a card because of the frequent flyer miles so they resort to paying by check or cash once they find out about the added fees.)

I would think with Viking it's a different story. I'm sure if you are signing up for a cruise you can pay with a credit card without the additional fee.

Are you using a Travelers Express card or some other type of card where Viking would be paying an abnormally higher % of the 'sale'? I know businesses pay a % of the transaction to the credit/debit card processors but 5% seems a bit higher than normal. (and that's a good reason to try and bargain when paying in cash)

I paid for our cruise/air/insurance thru Avalon's Canada office, no extra charge.

Just talked to Viking: there is no CC surcharge for US customers. They even reimburse FT fees if any. However E-check discount is only 2% now. So it may be wise to use credit cards now since many of them are already giving 2% cash back and additional perks.

Thanks all- food for thought. I book direct with Viking so no TA involved nor was I trying to use some sort of odd card , in fact I hadnt even told them which card it was that I planned to use. Am pretty fed up I must say. Its not so much the money as the feeling of being taken advantage of and the inconvenience of it all. Odd that so many of you dont have to pay this! Hhhmmmm................

Rules vary on this around the world.

The merchant agreements in North America have typically prevented the merchant from passing on the cc fee, and in some states it is actually illegal to do so.

All this is changing slowly though as a result of long running litigation that was completed last year.

This has not been an issue in Europe where such charges are allowed but must be 'reasonable'.

You will see these fees appearing in the USA over the months ahead and it is not unreasonable that they should as long as they reflect the actual cost of processing the payment method you elect to use.

In this case I doubt that Viking are paying 5%, that sounds more like something the phone agent made up on the spot, 1.5-3% is more typical.

The actual fee varies depending on the line of business, previous track record etc.

The small-print on my recent booking discloses the 2.5% figure and also mentions that there is no charge for debit cards.

Personally I don't find it unreasonable for a business to levy the charge as long as they offer ways of avoiding it, as they do in this case (debit card).

I understand the desire to use a credit card for the benefits that provides, but those benefits are not free, someone has to pay and increasingly for large transactions that is going to be us.

We booked direct with Viking using our Canadian credit card. No additional charge.

"In this case I doubt that Viking are paying 5%, that sounds more like something the phone agent made up on the spot, 1.5-3% is more typical"

I agree with this and, as I said, DH has negotiated the much lower rate for his business. He doesnt pass it on to customers nor do Amazon, EBay, PayPal and other large businesses. Its a pity Viking sees fit to. Something to bear in mind when booking holidays in future I think!

Everybody passes it on to the customers, it is build into your product price calculations.

When there is no cc charge then you might look for a discount for cash instead :)

It is not that uncommon these days, especially on large ticket items like a cruise, but wise to check before booking so you know the real total cost if using a credit card is important to you.

GCT is one company that gives up to a 10% discount for not using a CC. This can be dangerous if the company goes bankrupt. If you use a CC you pay the advertised price but can be charged some future price increases. This is all stated in the fine print.

The UK ban on "excessive" debit and credit card charges came into effect on the 7 April this year.

http://www.bbc.co.uk/news/business-22042309

The charges quoted by the OFT do date from 2011.

To levy 2.5% on a large amount with no maximum amount payable does appear excessive.

I would challenge the Company once more.

To levy 2.5% on a large amount with no maximum amount payable does appear excessive.

The CC companies do not limit the maximum amount payable by the company either, so that part is not unreasonable.

No harm in challenging the figure, and may well be worth doing, but if they can show that they are being charged 2.5% then it is obviously not 'unreasonable'.

I'm not going to be at all surprised to find that CC companies consider the travel business to be a relatively high risk business for them due to frequency of business failure, ephemeral nature of the product and the level of complaints about the product which they get dragged into. Throw in the very high value compared with the vast majority of their transactions and we may well find that 2.5% is accurate.

Debit cards on the other hand have a very low fixed charge so that is why they are often free to use.

The CC companies do not limit the maximum amount payable by the company either, so that part is not unreasonable.

 

No harm in challenging the figure, and may well be worth doing, but if they can show that they are being charged 2.5% then it is obviously not 'unreasonable'.

 

I'm not going to be at all surprised to find that CC companies consider the travel business to be a relatively high risk business for them due to frequency of business failure, ephemeral nature of the product and the level of complaints about the product which they get dragged into. Throw in the very high value compared with the vast majority of their transactions and we may well find that 2.5% is accurate.

 

Debit cards on the other hand have a very low fixed charge so that is why they are often free to use.

The OP stated that the Company claimed it was being charged 5% by the Credit Card Company, and was sharing it equally with it's client.

One major UK TA does set a maximum amount payable if using a credit card.

For my river cruise, my local, small, TA has not levied any charge for using a credit card.

As I have said there is a new UK law banning "excessive" charges, so the Company should have to prove the 2.5% charge it is levying.

The OP stated that the Company claimed it was being charged 5% by the Credit Card Company, and was sharing it equally with it's client.

One major UK TA does set a maximum amount payable if using a credit card.

For my river cruise, my local, small, TA has not levied any charge for using a credit card.

As I have said there is a new UK law banning "excessive" charges, so the Company should have to prove the 2.5% charge it is levying.

As I mentioned earlier, I doubt they are really being charged 5% and it would not be the first time that a rep on the telephone made up something to try and make a customer happier with what they were doing.

If you have a TA who does not charge you a fee or limits the fee then use them to remove the problem, that is only sensible.

The new UK regulations are going to help for sure, and as I said earlier, no harm in taking this further, although it doesn't seem particularly easy to make an official complaint at the moment, but Which? seem to be willing to help perhaps:

http://www.which.co.uk/campaigns/personal-finance/card-surcharges/report-rip-off-surcharges/

The guideline seems to be 'around 2% or so' so 2.5% is not much over the suggested level, but it can't hurt to try.

Edit: just had another look at my recent Viking invoice and there is a sticker on there quoting 2% for VISA/Mastercard and 3% for Amex/Diners, so they may already have made a change in response to the new rules.

This thread has been interesting as it outlines that some companies in some countries are passing on all or part of the credit card fees which I find unbelievable. If you book a cruise at Price $A then IMO that's what you should pay not get a surprise at the bottom of the invoice.

To give you another example I recently put a holding deposit on a holiday with Tauck. I'm in Australia and I'm dealing direct with their reservations department in the U.S. I paid with my Visa credit card without the addition of any additional fees added by Tauck. I expected and got the usual conversion fee added to my card by Visa but Tauck only charged me what I expected.

This is just another item to be added to the spreadsheet checklist before deciding on which company you finally choose. I can honestly say that if a river cruise company is going to charge me a surcharge because I wish to pay by credit card then you can bet they'll come off my list.

You can still pay the price you saw at the start, just use a payment method that doesn't come with a high charge for the retailer, like a debit card.

That 'free' protection that we love to get comes at a cost and we are the ones who pay it every time. If there isn't a cc charge it just means they already built it into the sticker price.

Personally I like the option to use a payment method that saves me money rather than get charged for using a credit card even if I don't.

In many ways it is more honest to keep the costs of the payment method separate from the main transaction, especially in countries where the consumer is protected from excessive charges.

Banks charge businesses a fee for processing credit cards so this is not an unusual charge. The amount depends on the bank, not the vendor (like Viking), and usually the vendor just includes the fee in the markup of the product. In the case of an out of country credit card the processing fees are usually higher than for a domestic card, so unless the vendor wants to absorb the difference (highly unlikely) they pass that fee on to the customer. This is why there is often a "discount" for paying cash - you (and the vendor) do not have to pay the bank a credit card processing fee. The credit card fee is always there; that is one way the bank makes money. You just don't see it.