Airlines And Credit Card Fees


Chris Elliot has a provocative article about airlines and credit card fees.   He suggests that this is the next frontier in the fee war that airlines have been waging on customers for several years now.   He cites two discount carriers, Allegiant and Spirit as having de facto credit card fees.

My Take

While I share his outrage at the airlines for their reckless treatment of their customers, I am not sure that Allegiant and Spirit are actually applying credit card fees.     This fee applies to everyone who does not purchase a ticket at the airport.    To me, it is just a hidden fee so that they can advertise low fares, and string prospective ers as far along the road to a ticket purchase as possible, before disclosing the real price.   Sadly, this practice is becoming more and more common with companies from cell phone carriers charging “regulatory recovery” fees to auto mechanics adding “shop fees”.    Don’t even get me started on event ticket “convenience fees”     These fees are all wrong and bad, but it is still not the same thing as a credit card fee, so long as they are not pushing you towards another method of payment.  Doing so would violate their merchant agreements with Mastercard, Visa, and the like.

When Is It Good To Pay Credit Card Fees?

Some European discount airlines are starting to accept PayPal, electronic checks, or other financing options in lieu of credit cards.    In this case, they are actually charging an additional fee for credit cards.

When would I pay these fees?  My gut response is never, however there may come a time where they are a necessary evil.     When it comes to travel, airlines in particular, it has long been held as a rule that you should always pay for your ticket with a credit card.    This is so that when airlines go out of business, you are protected.     Every time it happens, the news reports inform customers that if they paid with a credit card, they merely have to contact their bank and they will get their money back.   People who paid any other way are essentially hung out to dry.    If and when airlines start adding fees for credit card use, I will probably pay them, albeit reluctantly and with disgust.

What Fees You Should Worry About

I am not as worried about pure credit card fees from the airlines as I am with undisclosed foreign transaction fees.   Elliot hits the nail on the head when he berates companies for sneaking these in, seemingly at random, whenever some part of a transaction can be tied to some foreign company.   In all cases, these fees are reversed when you take the time to complain to your bank.   That is further evidence that these fees are bogus,  and that it is up to you to notice them and complain.    At this rate, any time you anything not made in the United States, you will risk getting hit with these bogus fees.    Elliot points out that the banks have already been hit with a major class action suit on this matter, and they seemed to have learned nothing.

Until then, be sure to use a card that does not charge foreign transaction fees whenever you are actually making purchases in other currencies.   Such cards include the Schwab Bank card or any card from  Capitol One.    It doesn’t hurt that these cards offer really good cash back rewards as well.

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