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Jet2holidays to scrap credit card fees

Jet2holidays has announced it will be the first major UK tour operator to drop credit card charges for customers in a move that could be copied by its competitors.

The company, along with sister airline Jet2.com, has abandoned the additional fee in a bid to “make booking a holiday or a flight as friendly, convenient and competitively priced as possible”. It will still charge for American Express payments.

Previously the tour operator charged 2.5% up to a maximum of £50. This means for a £2,000 holiday, customers would have had to pay an additional £50.

Three of Jet2’s biggest competitors still charge when customers use a credit card.

Thomas Cook levies a 2% surcharge (4% for American Express) up to a maximum of £95 per transaction while Thomson and First Choice charge 1.5% up to a maximum of £95.

Monarch holidays asks customers for 3% of the total fee or £5, whichever is greater.

The cost surrounding processing payments has recently come under scrutiny by the European Union.

In December a cap was placed on the amount companies such as Visa and MasterCard can charge for processing card fees, although there is no guarantee this will lead to lower fees for small and medium-sized firms.

It is up to card processing firms, such as Worldpay and Barclaycard, whether they pass on these lower fees.

Stephen Hart, chief executive and founder of comparison website Cardswitcher, belies that other travel firms could follow in the footsteps of Jet2holidays.

"Companies like Jet2 can now afford to absorb credit card charges within their margin structure without needing to pass them separately onto consumers, like they have always done with debit card costs," he said.

"I would expect larger travel agents to either remove surcharges for credit card payments or if they don’t remove them entirely, to greatly reduce the rate of the surcharge."

However, Hart warned that smaller travel companies may not benefit from the knock-on effects of the EU cap because “card processing companies charge their customers using 2 different models.”

A spokesperson for Monarch said the company had “no plans at the present time for a change in policy.”

Thomas Cook said: “For the time being, the company has decided to keep credit cards surcharges at the same level of 2%.”

Both companies, along with Jet2holidays, Thomson and First Choice don’t charge for debit card use.

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