How Qantas’ new credit card surcharges affect flyers

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After previously slapping flyers with fixed credit card surcharges, Qantas has announced it will start charging passengers percentage-based fees for payments with plastic.

Currently, Qantas charges $7 per credit card booking for domestic flights and $30 per international flight. But under the new fee structure, which was overhauled in the wake of the Reserve Bank’s ban on surcharges that don’t reflect actual airfares, transactions will attract a 1.3% charge of the booking value, with surcharges for domestic flights capped at $11, and international flights at $70.

For customers paying less than $535 for domestic and trans-Tasman flights and under $2,300 for international trips, which will be the majority of economy passengers, the new rules will mean lower fees.

Those paying above those prices, which would include first and business class passengers as well as some economy flyers travelling during peak seasons, will pay more than they do now, with caps kicking in at $846 (domestic/trans-Tasman) and $5,385 (international).

Passengers paying with debit cards will be charged 0.6% (with the same caps) under the new fee structure, which will take effect from 1 September.

Earlier this year, consumer group Choice said the flying kangaroo’s card fee on cheap flights was 348% more than the likely cost of the transaction of $1.56, and although it said Qantas’ announcement was “encouraging” for consumers, it remained critical of the carrier, Fairfax Media reported.

“This decision clearly reflects Qantas's commitment to gouging consumers for as long as possible, with the lower fees not taking effect for another two months,” Choice spokesman Tom Godfrey said.

“They've been charging high fees for years and have only changed their ways after a lengthy campaign from Choice and new federal laws to prevent online card payment rip-offs.”

How low cost carriers Jetstar and Tigerair, whose main source of profit may well come from credit card fees, cope with the new laws will be interesting. According to Choice, Jetstar’s current $8.50 surcharge, accounted for a mark-up of 1,187 per cent on the likely cost of 66 cents.

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