Airlines Could Start Charging Extra For Credit Cards

Could extra fees for using a credit card to pay become the airline industry’s hot new trend?

Some airlines are adding on credit card transaction fees at the time of ticket purchase that far exceed their actual cost, and are only disclosed at the very last stage of the purchase process. Spirit charges $4.90 for the favor of running your plastic, and Allegiant charges $14. With American Airline’s laser eye on the bottom line and US Airways trying to do everything Spirit does, might this become the latest fee fad for the struggling airline industry? Christopher Elliot thinks so.

(Thanks to Rebecca!) (Photo: Cranky Media Guy)

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  1. ElPresidente408 says:

    JetBlue and Southwest only accept CC in-flight

  2. ApupnamedShamus says:

    Uhmmmm. Charging a ‘credit card fee’ is clearly against Visa and Mastercard Merchant Terms of Service. And if they accept Amex with those other cards, then the same rule applies for them. The only card that has no clear rule or associated rule is Discover. This is why gas stations offer a ‘cash discount’ to try and get away with it. But still, the ADVERTISED price has to be the credit price. Unless the airlines are offering a discount if you pay with cash (online???) then they are in violation of the agreement and subject to fines and loss of merchant account.

    • farcedude says:

      @ApupnamedShamus: That’s what I would wonder – how are you supposed to pay with anything besides a credit card these days. I suppose you could use a debit card, but besides walking up to the ticket counter and paying in cash, what’s your option here?

      • madanthony says:

        @farcedude:

        actually, walking up to the counter and paying in cash is exactly the “option” they give you. And since it’s a fee for buying online, not explicitly for paying with a credit card, it’s probably OK under their merchant agreement.

        Spirit adds a $4.90 passenger usage fee for bookings not made in person at its airport locations. And Allegiant applies a $14 surcharge to tickets booked through its Web site but waives this “convenience” fee if you buy in person at one of its ticket offices. Both are de-facto credit card fees.

        • Al Swearengen says:

          @madanthony:

          So, if what you say holds true, if you buy at the counter with a credit card they would not charge you extra. Let’s see if it truly works out that way.

          Really, buying online should be cheaper then buying at the counter. Sure there are server and programming costs, but you should make up those costs with the increase in sales volume. I’m willing to bet that processing ticket sales at the counter are less efficient and more expensive than buying online, its just that the airlines don’t want to give the 2% to credit card companies.

          And who books at the counter anyway? People usually buy their tickets far in advance of the flight, and they don’t usually make a trip to the airport to buy the tickets weeks ahead of time, unless perhaps they are frequent business travelers. And what about if you get the tickets through a travel agency? Is that considered the counter so that you wouldn’t be charged extra? People just don’t buy their tickets at the counter.

          Let’s call it what it is, another way to screw people out of a few extra dollars. Its like Ticketmaster charging people a “convenience fee” for using Ticketmaster or them charging you an up front parking fee even if you don’t need to park (you can walk to the venue).

      • SharkD says:

        @farcedude: Some airlines charge a fee for purchasing tickets in person, at the counter, IIRC.

        • econobiker says:

          @sharkd: 2nded on your comment.

          These airlines are learning from the phone industry and rental car industry in how to nickel and dime their way to profits…

        • FatLynn says:

          @sharkd: Yes. Also, some charge for booking over the phone. I actually had a phone rep for AA walk me through a tricky booking situation online so that I could avoid the fee.

    • pop top says:

      @ApupnamedShamus: Something I just thought of is that the airlines are supposed to be suspicious of people who purchase their tickets with cash. So trying to avoid yet another airline fee might get you pulled out of the security line for some rubber glove-type searches…

  3. augiet65 says:

    I thought charging more for using a CC was against the merchant agreement.

    • AJ_Syrinx says:

      @augiet65: It’s supposed to be. Who knows anymore, right?

    • gStein_*|bringing starpipe back|* says:

      @augiet65: normally, yes.
      but i think that apple stores have a separate merchant agreement – at least, i think i’ve read that before.

      need to run to class, will do more research on that later.

    • Kogenta says:

      @augiet65: They aren’t charging you for using a credit card, they’re charging you for using their online options (naturally you can’t use cash online, so it amounts to the same thing almost, but there is a distinction in theory)

  4. Sneeje says:

    That will just serve to make me stop using credit cards. Sorry, MC/VISA!

  5. TakingItSeriously is a Technopile says:

    Definitely another fee to shore up a faulty bussiness. most air travel is booked by credit card well in advance. Even with these fees people are unlikely to pay for flights with cash or check in any appreciable amount.

    • QuantumRiff says:

      @TakingItSeriously is Simon: Can you actually pay with cash or check anymore? I was under the assumption that purchasing via cash or check at the counter was going away, since it didn’t give our big brother enough time to run our names through their database.. (and the costs of accounting for the cash).

  6. Burning pakalolo not even noticing the weather says:

    So how the heck am I supposed to pay for my ticket? I thought cash was frowned upon and you were looked at as a terrorist for paying that way. Why should I pay a fee to pay for something? Can airlines please stop nickle and diming us? Please?

  7. pearl says:

    Ugh this is a horrible implementation. Right now I’m in Europe and booking with any discount airlines like Ryan Air or Easy Jet requires at least an extra €10 above advertised price, unless you have a Visa electron card, which are not really available in the States and seemingly can’t be acquired where I’m at, Germany, without a fee. Easy Jet actually charges almost €5 per one way flight using a Visa debit card, and almost €10 per one way flight with every other card. Either way, I don’t see the necessity for such a thing… haven’t they made off enough with holiday pricing and baggage fees?

  8. fordpickup says:

    Dear Airlines,

    Please just build more of the operating costs into the actual ticket cost. I won’t feel like I’m getting nickle-and-dimed and you will be able to move closer to turning a profit without looking like Cash4Gold.

    Best,

    Fordpickup

    • magic8ball says:

      @fordpickup: SERIOUSLY. They could charge me the exact same amount upfront, and I would have no complaints – I would pay the price for the ticket if it seemed reasonable, or walk away if it didn’t. But when they show me a lower ticket price and make up the difference with spurious fees, it pisses me off. Just TELL ME how much the ticket ACTUALLY costs, so I can make an informed decision. It’s particularly insidious when they tack the fee on at the very end of the purchasing process, because they know people are less likely to back out once the’ve gone to the trouble of finding the right flight, entering all their payment information, etc.

      • Haltingpoint says:

        @magic8ball: The reason they are doing the price increase through additional fees is because of the importance of being able to advertise a lower ticket price. What would get you more interested–a $99 ticket or a $399 ticket? Sure many people might be turned off when they investigate fees but the ROI is worth it to them.

        Additionally, sites like Expedia and Travelocity are all about sorting by price, so a lower base price ticket is the most important thing. It is pure deception.

  9. ARP says:

    Of course, in addition to actually buying at ticket at the airport (have you ever tried it, it’s hell), if you buy at the airport, its harder to find the right flight/fee that you found online. Likely, the particular fee is already gone, unless you’re booking months in advance. So, its essentially a way to pay higher fares.

  10. GreatWhiteNorth says:

    Seems to me one of the flags that gets raised resulting in extra attention to a passenger is “paid cash for ticket”…

    We all know that folks who pay cash for airline tickets are either drug dealers, fugitives, terrorists or some other undesirable…

    So now to save the soon to be $40 paid by credit card fee, we will pay by cash. Then we will go for the extra level of screening reserved for high risk travelers.

  11. tape says:

    So, you generally get charged more for not buying online in advance. And now you get charged for buying online in advance.

    It’s a good thing I gave up on flying about 5 years ago.

  12. wcnghj says:

    Illegal in like 6 states and not allowed for VISA or MC merchants.

    If you are charged a credit card fee, get a chargeback on that amount, the merchant will shape up.

    • Esquire99 says:

      @wcnghj:
      The illegality in 6 states is interesting. I wonder if the airlines are based in any of those states. I imagine that a careful structuring of the legal location and operation of the entity accepting/processing the payment could avoid those states’ laws, though.

      • RPHP says:

        @Esquire99: That is interesting – I never heard it was illegal in 6 states. However, as noted in above comments this seems like a fee for booking online versus booking in person. Therefore, it is not technically a CC Fee (because apparently using a CC in person does not incur the fee) and probably would fall outside the confines of those laws anyway.

    • corkdork says:

      @wcnghj: Anyone know what 6 states a CC fee like this would be illegal in? Just curious.

  13. ElizabethD says:

    Whiskey. Tango. Foxtrot. ??????

    So, I vote we all bring our airfare to the ticket counter in PENNIES, in big muslin bags. “Skycap — some help here please.”

  14. econobiker says:

    “We must charge you an extra fee for you to get a discount.”

    Milo Minderbinder would be proud…

  15. Saltillopunk says:

    It has been touched upon in several comments here, but could easily be overlooked by those who don’t read them all. In the case of Spirit, this fee is for booking online. As it was explained in a local news article a little while back, the ticket can be purchased in person, at the ticket counter, and there will not be a fee. I can’t speak to the other airline mentioned, but it might be a similar situation.

    • crackblind says:

      @Saltillopunk: And how much does it cost to go out to the airport – tolls & parking fees? Plus the cost of your time?

    • Jevia says:

      @Saltillopunk: I love how they will charge you a fee for booking online, but not getting your ticket in person. But if you check-in for the flight in person, you pay an extra “check-in” fee (at least if you have a bag), but no extra fee (beyond the base bag fee) if you check in online.

  16. rellog321 says:

    Sorry, I know many believe that government shouldn’t tell businesses how to run, but they need to step in on all the “fees” and “add-ons” that consumers are getting hit with. If it isn’t airlines, it’s the telecommunications companies, ISPs and cable/sat companies. Time to institute a “true in pricing” law of some sort…

  17. diasdiem says:

    Perhaps its finally time for us all to consider alternative means of transportation.

  18. digitalgimpus says:

    1. Violation of merchant agreement.

    2. What other options besides credit/debit cards exist? I don’t think any airline accepts cash or personal checks anymore. Credit cards are part of their “security” (verification) scheme.

  19. Ihaveasmartpuppy says:

    Well, if people put up with they’ll keep doing it. More and more fees, fees for everything. What if people stopped flying? I mean, anything other than emergencies or strictly necessary flights? Yes I know the whole travel industry would hurt, but maybe they could help pressure the airlines to wake up. I say boycott.

  20. johnfrombrooklyn says:

    I met a gentleman the other day – probably in his 70s or early 80s – who told me a great story. In the 1950s if you flew PanAm First Class to Argentina, the stewardesses would actually wheel out a cart with a Hibachi, light the charcoal, and grill up Argentinian beef for you in the cabin. Since Hibachis don’t put out much smoke, the airplane vents would just take care of it. And since most travelers were smoking cigarettes on the plane, it didn’t add much anyway. Every traveler in First Class could pick a red or white wine and get an entire bottle. If you didn’t drink the bottle you could take it with you off the flight.

  21. subtlefrog says:

    I think most people are missing the point. They aren’t charging to use the credit card, they are charging to book online. They know that few people are going to go wait in line at the airport to buy, or go find a ticketing office. Online is where the majority of the ticket sales happen, and as someone else said, they don’t WANT you to avoid the fees. They are essentially increasing the cost of the ticket by $4.90 or $14 for all but a tiny portion of people buying the ticket.

    If you don’t want to pay it, find out if you are looking at an airline that will charge one of these fees, and go to a travel agent, or a licensed ticket agent, and have book through them. If that’s not worth the money to you, pay it. Or, book on another airline.

    This is irritating, but these appear to be the options they have left us.

  22. SatisfriedCrustomer says:

    I’d sooner expect them to charge a fee for paying anything at the counter – it delays the whole line. Naturally they got it backwards.

  23. u1itn0w2day says:

    Just build the freaken cost of doing business into the price of your product . I don’t want an itemized list from your balance sheet . I don’t want to be nickel & dimed . If you need a bailout simply ask for one like everyone else .

    Just build the everything into the price and not disguise your actual price with all these petty fees .

  24. crimebll says:

    On the other hand, how is this different from the “convenience fees” everybody else charges. I’ve had Ticketron tack on fees totaling 1/3 of the price of my ticket.

  25. Mecharine says:

    Why can’t people just take trains? Sure it may take longer, but you wont pay fees just to pay the bill. Don’t forget that you can actually see the scenery you pass, and not just assume that its somewhere under your plane.

    • Jevia says:

      @Mecharine: Well, for one thing, trains usually don’t go across oceans, so trips to islands or Europe can be hard.

      Its also a time issue. If I have one week of vacation, but it takes me 3 days to drive/train to California, then I get one day to visit with family before I have to go back. Maybe a train would take 2 days travel, so I get 3 days with family. Still pretty short when I can fly in one day.

  26. sevenwhitehorses says:

    i bet the cc companies go along with it. they have in their agreement for merchants that id does not have to be shown HOWEVER when I called mastercard they informed me that it is up to the store owner even though that is in conflict with what the agreement says.

  27. jp7570 says:

    The last time I tried to buy a ticket at the counter was 2 years ago. American Airlines kindly charged me abn additional $30 for the “privelege” of talking to a real live person as part of the transaction. When I went to pay, they would not take a check and could only take cash if it was for the exact amount (since they could not make change). The only way to pay was by credit card.

    Maybe AA has changed some of their counter policies since then, but it sure seems that they are only set up for credit transactions when it comes to ticket purchases.

  28. barco says:

    I paid cash three times last year, and each time I was “randomly selected” and got hit with the SSSS on the boarding pass.

    Everybody needs to start paying cash just so they’ll be forced to cut out that crap.

  29. winshape says:

    @craptastico: Seriously, that was my first thought.

    So it is cheaper to purchase the tickets online, but since you can only purchse tickets online by using a credit card, there’s no way to avoid paying a credit card convenience fee.

    It’s lose-lose!

  30. farcedude says:

    @CompyPaq: No, see that’s another function of the cup-holder that your computer comes with – just place the folded $100 bills in, and you’ll never see it again!

  31. NeverLetMeDown says:

    @bohemian:

    Nope, you can always walk up to the counter and pay cash.

  32. pot_roast says:

    @jvanbrecht: This is completely false. AirTran, Delta/Northwest, Alaska, United, and others will happily take cash. They almost have to, since a lot of people pay for those annoying baggage fees?

  33. Inglix_the_Mad says:

    @pot_roast: How long until you see someone pay for a $400 ticket with change?

    /snicker
    //but it’s legal tender officer!

  34. jamar0303 says:

    @PsiCop: Once upon a time I saw a SNL skit that went kinda along those lines posted on a Japanese video sharing site. The comments were a combination of laughter, shock, and pity. Because this kind of thing doesn’t happen over there. They get to have airlines like ANA on their domestic routes. We have United.

  35. RPHP says:

    @wcnghj: I think you are misunderstanding Esquire99′s point and you totally ignore mine.

    To explain what I think 99 is talking about – with the online world I believe a transaction may legally take place where the retailer is based rather than the consumer in some instances (99 correct me if I am wrong). Therefore, your state law would not apply to the transaction because it technically did not take place in your state.

    I will not repeat my point from above but that provides an additional reason why even if the transaction takes place in your state it may be legal.

  36. ARP says:

    @RPHP: In addition, even if they can’t get around that particular law, I think they’re getting around the entire cc fee structure by charging an “online booking fee” and not a credit card fee. Of course, CC’s are one of the few means to actually book online. And if you sent in a check, they could say that the fare is subject to change until the check clears. So, they’ve essentially made it a legal CC fee by process of elimination and the administrative burden to do it any other way. The only grey areas would be a debit card or paypal (if they accept it).

  37. RPHP says:

    @ARP: exactly.

  38. Sneeje says:

    @Rectilinear Propagation: No, I do. My point just is that I’m neither going to pay someone else to use my CC, nor am I going to pay a CC company to use one. The moment I do, it will not be used. Bad for them. I will find some other way to pay or I will do without.

    To take any other approach means that we as consumers might as well accept that this will become one more direct cost that we will start bearing. I don’t need a CC that much.

  39. acasto says:

    @Ronin-Democrat: What does having a college degree have to do with anything? I would think someone who attaches that kind of label to something would know the difference between a Catch-22 and Cicular Logic, aka Begging the Question.

  40. Powerlurker says:

    @jamar0303:

    Are Japanese domestic airlines really that much better? I once flew ANA from NRT to FUK, and besides being the only time I’ve flown on a 737 in single-class configuration it didn’t seem that much different from any other airline I’ve flown on. That having been said, the Japanese domestic airline industry is VERY different from the US one in a number of ways, between filling 747s with single-class seating (Tokyo-Haneda to Sapporo-New Chitose is the busiest airline route in the world) and discount airlines that won’t accept bookings more than a month or so in advance. Let’s also not forget that JAL is currently hemorrhaging money and will likely be bought out soon.

  41. jamar0303 says:

    @crimebll: Which is why we need HSR. Shinkansen speeds would mean that the alternative would only be 4-5 hours, not 14.