The British Airways credit card fee increased yesterday from £4.50 to £5 per booking. This is the first increase since the fee was introduced in 2009 (was it really so long ago?).
Despite this, British Airways still claims that it does not recover its entire credit card costs. Arguably this is a moot point, since it is still cheaper than accepting cheque payments or running city centre ticket offices to receive cash!
Customers could use a debit card, of course, but would have no protection if BA went bust and would fail to receive the travel insurance benefits that come with most credit cards. BA would also lose business, especially for higher priced tickets, to online travel agents who do take credit cards – but also take a commission from BA.
The lucky residents of many other countries in the drop-down menu on ba.com still seem to be exempt from payment …..
At least BA has not gone down the Virgin Atlantic route with a flat charge of 1.5% whatever the total, which is a killer on long-haul bookings. The BA fee is also per booking and not per passenger.
The seat selection fee also crept up a few weeks ago without most people noticing.
The current British Airways seat selection fees can be seen in this chart:
Given the huge number of BA routes, it is impractical to list which flights fall into which band. You can make a pretty good guess, though, based on how far you are flying.
LH is long-haul, SH is short-haul, ‘Upper’ refers to the top deck of a Boeing 747.
I am stunned that there are people paying £85 EACH WAY PER PERSON to prebook seats on a long-haul flight, but clearly this is proving to be a good revenue generator for British Airways. It may be playing on the naivity of very occasional premium flyers, however, since anyone who flies more than two long-haul Club World trips per year is likely to have Silver status (and free seat selection) in any event.
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“Customers could use a debit card, of course, but would have no protection if BA went bust” – it’s true there is no legal protection like Section 75 for credit cards, but the majority of providers are signed up to the Chargeback scheme, a voluntary system where your bank tries to recover funds from the airline’s bank. As long as there has been a breach of contract it is worth attempting. Read http://www.which.co.uk/consumer-rights/problem/how-do-i-use-chargeback and http://www.moneysavingexpert.com/shopping/visa-mastercard-chargeback
“•If you choose to pay using a UK billed credit card or PayPal, you will incur a surcharge of £5.00 per passenger.” Raffles – a minor changed is required above. Sadly the fee is per passenger.
Yes it is per passenger not per booking…for a family of 4 in club to the west coast USA the additional cost to select seats in club world including booking fee is a gobsmacking £700…… You really would need to be mad!
If BA would go bust and you paid with debit card, would the travel insurance not cover it.
It is a bit silly to promote the BA credit card and then you cannot use it. Perhaps you can book the flights on AmEx travel site.
Depends on your policy – some only provide “schedule airline failure” as an optional extra.
I always book on Amex travel if I can because
– it lets you pay in GBP
– 4x MR in first year of Gold Amex
– no pesky fees
Downsides:
– no HBO fares
– no WTP fares
– not sure if can UUA
– if flexible ticket, need to go through Amex travel to change
Worth mentioning that if paying with Amex, you can choose an exempt country regardless of the actual country your card actually bills to and avoid charges completely. Amex dont incorporate the country into security screening during the authorisation process and tickets issue immediately in the normal.way. Not sure how this works with other card providers.
Wish I’d known that yesterday when paying with my BA Premium Plus AMEX. Ironically that’s the very card you’d most expect BA not to charge a fee on anyway…..but nope!
How do you do this? Do you not have to add the address associated with the card?
When I implemented online card services in my last company several years ago, I found out that the address verification works simply on the numbers in your address, ie house number and postcode. This can be further secured if the retailer wants with other options, but that will result in a higher number of transactions failing. This was before verified by Visa etc, but the process was still the same for call centre card payments.
Which are the exempt countries?
Every country except UK
I can just about live with the credit card fee but I cannot abide the seat selection fee. I feel BA is ripping off their customers with this. BA CW fares are usually at the very high end when compared with their competitors, especially on popular routes. I therefore think seat selection should be included in the ticket price. In WT I could accept paying to select a bulkhead seat, the rare pairs of seats appearing on some aircraft but that’s it. Paying to select any seat is a joke and is a ripoff for families in particular who will feel obliged to pay them. Same argument applies as for CW, WT fares are at the high end compared to the competition so I think seat selection should be free. I have recently been searching revenue fares from EDI to BKK or HKG. BA has been consistently 50-90% more than the cheapest fares offered by LH, AF/KLM and QR and then they have the cheek to expect a steep seat selection fee on top. Is BA seeing passenger growth or just revenue growth at expense of naive passengers? I believe there must be tens of thousands of people just book BA without fully exploring their options and end up paying the price for it. For premium seats it is even more perplexing. It is not difficult to get full flat beds on competitors business cabins for prices that are comparable to, and sometimes less than WTP fares. And, although I still like the privacy it offers, let’s face it, CW is now lagging behind almost all the competition and despite this BA charge at the high end. The only explanation I can see is that they must still be the worlds favourite airline for naive customers.
I think it might be more to do with naive businesses paying for CW – or maybe they just prefer direct flights if possible (I think the majority of premium traffic will start in LHR)
I don’t think families feel obliged to pay for seats unless they are all adults, in which case they might not really care about sitting together.
What we need to know is what fee the card companies are charging BA , as a small time retailer with a lot of mail order ( the latter considered higher risk by card companies) i only pay 1.3 % or 16p per debit card , this I consider high , i have no financial muscle for negotiation , so are BA really paying fees higher than this ? I think not .
Do you take Amex, and if so what do they charge you?
No , I refused albeit years ago when they were taking a much higher fee than they do today.
We started taking in AMEX in my wife’s business a few weeks ago as they are now much more competitive but there was something else that attracted me to it. They are doing it commission free for us for the rest of 2014 and then1.5% starting on Jan 1st 2015. You can probably guess what I’m doing for the rest of 2014 with the machine.
Whatever it is, I assume it will go down significantly for Mastercard and visa transactions from 1 Jan.
PB – I can help clarify as I do negotiate for travel companies with merchant services providers. Bare in mind travel companies are basically thrown together with gambling sites / porn as VERY high risk (probably rightly so) and many providers refuse to deal with any travel companies. For most travel companies / airlines you are looking at double your rates (2.3-2.6% are standard). There’s not a lot of companies fighting for your business either! BA will have far more preferential rates (guessing 1.6-1.8%), however the level of risk by protecting BA clients is small, but the liability huge. BA is certainly not immune – another 9/11, a crash, bung in their ‘flying pension pot’ etc etc.
Anyway, in more cheerful news, AMEX (who negotiate independently) have been slashing their rates for small-medium businesses across the UK to encourage Merchants to take them up – expect to see AMEX rates start being amongst the lowest for credit card companies (although cannot say if ultimately this will affect the level of ‘perks’ they can provide).
I’d love to better understand how Amex operates. As far as I can tell it’s a scheme and a card issuer, so presumably it gets to set its own interchange for its own cards in the way that, say, Lloyds cannot. With Visa rates dropping from 1 Jan, one would assume that would drag down Amex rates and, eventually, the benefits we get as cardholders. It might sound a bit geeky, but a post on how amex differs from other credit card companies would be interesting!
Nick, if it helps, AMEX entirely negotiates independently. MC/VI, debit cards etc – rates are set by Merchant Account providers that may / may not be attached to banks (i.e. Worldpay was RBS, when it was sold it dumped most of it’s travel accounts to minimise risks). All merchant accounts offer / partner with systems that process the payments, which will also process AMEX payments by default if you have an agreement with American Express (often for small transaction fee i.e. 10p), but 100% of the risk is with AMEX, but with VI/MC the risk is with the merchant account provider.
Andrew Seftel is probably your man for that if he sees this!
Thanks , i had considered the liability aspect but considered ,as you pointed out, the capitalisation of BA would be sufficient to depress that concern , although you have to think never say never a la RBS .
Do you have to pay the seat fees on club world avios redemptions?
I’m hoping to take my family to Toronto next year in Business, but don’t want to have to pay a further £700 on top of the £550 taxes per person.
This is ludicrous….,
You don’t have to pay but you can’t choose a seat till online check in opens and risk sitting apart.
BA plays on this fear and I hate it.
Others really like it.
So, is online check in 24 hours before?
If your travel party includes children (11 and under) BA will automatically pre allocate seats together T-72. When online check in opens T-24, you have the option to accept the seats as pre assigned or to change to something else more to your liking without an additional charge. BA scare mongering at its best!
I imagine so. The only exception I’ve found is redemptions in first (I’ve no idea about cash fares in first, I’m not that rich/stupid!). Always struck me as odd that I have to pay the fee for a cash booking in club Europe, but not for a redemption in first, but there you go.
For what it’s worth, the increase in prices might mean that there is less need to reserve seats as less people will be doing it. I’ve also been asked to move seats before by families who have been split up; I’m always happy to do this rather than sit next to someone’s kid for hours!
I must say I was just wondering about this. If a family travelling together are not allocated seats together, what if the parents don’t care? Not sitting next to a kid for 7 hours or more might be quite a treat for them.
I wouldn’t pay it. I imagine you would prefer the seats together in centre anyway which you will get easy enough. Given the privacy nature of CW then I think families best just to avoid paying to reserve seats at all. Exception is if you have very young kids but then it might be better choosing another airline with a more family-friendly seat layout.
Worth pointing out that companies are bound by the Consumer Protection (Payment Surcharges) Regulations 2012 – In essence the Regulations ban traders from charging consumers more than the cost borne to them for accepting a given means of payment. £5 on a short haul domestic flight is certainly going to fall foul.
A word of support for Virgin is that I just paid 51p surcharge for a domestic return flight – much more acceptable than £5.
But Ken, when you fly Club to New York, you’d be a massive loser with Virgin (!) at 1.5% vs £5.
I do think you are correct though, but you’re in a very small % of people that lose in this situation – what’s the tipping point – £330? As I mentioned up thread both companies will be losing out in the costs incurred from merchant services vs costs charged to consumers overall, but Virgin more accurately reflect the charges incurred in each individual case, but be interesting what viewpoint would be taken if BA were challenged – ultimately they could take a Virgin charging viewpoint, and most people here would lose out.
Sam – on what basis do you say “most people here would loose out” ?
I think many people would not loose out, and it would simply be fair. Why should those of us who do loose out now (making frequent lower value payments) subsidise thouse of you making (generally) only higher value payments?
Are you suggesting that you actually pay this fee?! Doesn’t sound the sort of thing that a man with your detailed knowledge of how ba.com works would do ….!
If the card earns points, and it is all on expenses… and I don’t like the person paying.
Plenty of people make many sub-£330 trasnactions with BA, where the fee is utterly disproportionate.
As the transaction value gets higher, the flat fee becomes a lower and lower percentage. So the argument really is there for it to be largely % based (which is what BA is being charged).
Hi David, just to clarify 90% of my BA flying is short haul, sub £330 so I’m with you (although I simply get my company to issue any BA tix, so irrelevant!).
I have to be honest there is no fact behind my “most people here would lose out” comment – I am making the presumption that most BA ‘baskets’ are higher than £330. Unaware of any average transaction figures – would be interested if there are any. Do you think that the average basket is below this?
Would expect the mean transaction value to be higher than 330, but wouldn’t be surprised if the median was much lower…
The long argument does not take into account the fact that long haul/higher fares have arbitrarily higher YQ (airline’s fees and charges that have nothing actual to do with fuel cost and little to do with operating cost, as it depends on how full the plane is, the weather, the wind and what not).
From that viewpoint, on high value tickets BA does recover payment processing costs and Virgin profits.
Frustrating I suppose but no big issues from me on the CC fee given the comparable charges with other airlines although I feel they shouldn’t charge a fee for using the BA amex as those holding this card are in essence supporting the BA brand. I suppose the £5 fee looks rich on domestic flights though.
As for seat selection, it’s not a rip off IMO as you have a choice whether to pay or not, basic no status holders get free at 24 hours prior and bronze from 7 days out, silver and better obviously get it free anyway.
I was completely unaware of this. My first thought on seeing the scale of charges here was “Am I looking at the Ryanair price list for extras?”. Truly we are looking at the Ryanairization of BA.
Think I saw a report somewhere that the cost of processing a credit card transaction online is a very low number of pence. It isn’t proportionate at all, to the value of the transaction either.
Just to upset anyone who pays these outrageous fees even more, IME blanket free of charge seat selection in any class at time of booking is readily given away as a policy by BA to all levels of traveller of corporate customers.
We recently experienced the Ryanairization. When we checked in at T5 to fly to Pisa with two suitcases and no hand luggage one suitcase was lighter for my wife to pull although the total was within the two X weight limit. We were advised that cases were now weighed separately and we had to pay £40 excess baggage. On the way back from Malpensa, after distributing the weight equally, the cases were weighed together.
I complained, mentioning Ryanair, but was fobbed off.
Why did you not repack at check in, and then repack after collecting?
Ryanairization! – Well worth remembering that this is what Willie Walsh did to Aer Lingus when he was in charge there! Seems to be following the same path with BA though at a slower pace. Also Ryanair charge 2% for credit cards which means that BA charges now work out higher on short haul journeys up to 250 Stg! I wonder who is making money from all this!
I agree with the comments above about use of the BA amex card – seems to be hit for supporting BA in the first place.
Do people really have the BA Amex to support BA? I certainly dont, i just use it to gain more avios and if a better deal came along i would ditch it without a thought.
slightly off topic but the virgin site for checking reward availably has been updated, now much easier to see availability in all cabins for each month at once.
Canada does not allow credit card surcharges in general (but not sure if they’re covered)
I’ve heard people say a few times about changing your country to avoid the Fee but never worked out how. I tried it once but the 4.50 Still appeared at checkout. I do take exception paying it with my BAPP card however. So I generally use Debit card if below what I think the 3 x Avios is worth paying the fee for. So probably around 300.
I think it is a ripoff BA charging this for Cheap domestics. I once flew MAN to LHR for £35 and only realised afterwards I was charged £4.50. It’s when I first got my BA amex so was none the wiser. I realised I’d paid a fee of almost 15% to use my Amex to basically get 105 extra Avios, at the time I opened a dispute console with Amex as felt BA were in breach of regulations regarding this. I should have pursued it with the Ombudsman but didn’t at the time.
Now I use Debit card mostly . But if someone could explain the country thing more clearly? Oh did a lot of BA day trips before the summer. £45ish each way. Paid with Debit. Then on offered PAUGs paid with Amex as upgrades don’t incur a fee!
So aside from the principle of the Fee, their applying of it is completely inconsistent.
On ba.com, change ‘Country of card issuance’ on the payment page to, say, Ukraine and then use an Amex-issued Amex. No fee. You will be charged with a Visa or MC or non-Amex Amex.
I book my BA flights at https://travel.americanexpress.co.uk/ and I don’t pay a penny in credit card fees. Besides the fact that you can only pay with an Amex card (any Amex card, not just BA’s), am I missing anything?
Just saw JQ’s comment above, sorry for the noise (and thanks JQ).