Treasury: Excessive card surcharges to be banned

New rules to take effect by end of 2012

The government has revealed plans to ban the imposition of "excessive" fees on certain credit or debit card purchases by the end of 2012.

The plans aim to wipe out excessive charges often added to online purchases through airlines, booking agencies and even councils- but will still allow firms to levy a small charge to cover payment processing costs.

The move follows the publication of a report by regulator the Office of Fair Trading in June, which said that surcharges for using a debit card for travel should be banned. However, the plans go beyond the OFT's recommendation in their aim to target all extreme surcharges, including those levied by local authorities and the DVLA.

Examples of surcharges currently charged include Trainline.com's £3.50/booking fee on debit credit card use, DVLA's £2.50 for tax disc purchases on credit card, and the whopping 17 euros per person on credit card charged by Air Berlin.

Airline passengers alone pay more than £265,000 a day in card surcharges- despite debit card transactions only costing the trader about 20p and credit cards costing 1-2per cent of the total price, according to executive director of Which?, Richard Lloyd.

In bringing in the surcharge ban, the government will effectively be bringing forward the implementation of new European rules, which were initially predicted to take effect in mid-2014.