Airline credit card fees a rip-off: Choice

Consumers have been urged to consider paying for flights on debit cards to avoid forking out for credit card booking fees.

Consumer group Choice claims credit card booking fees are excessive, particularly for consumers buying cheaper fares and internet specials, because the charge is a flat fee per passenger — not a percentage of the total transaction.

Qantas charges credit card holders $7.70 per passenger for domestic flights and $25 for overseas flights. Tiger charges a "convenience fee" of $6 per passenger per flight.

This is despite falling merchant fees, Choice claims.

A passenger on a discount fare costing $200 may have to pay Qantas up to 3.5 times the average cost for merchants to process such a transaction, the group says.

Choice has urged consumers to consider alternative payment methods, such as debit cards, where such surcharges might not apply.

But airlines today defended accusations they were charging excessive credit fees for domestic and international flights.

Qantas said its credit card booking system was transparent and necessary to recover costs.

"We believe our approach is straightforward and have standardised the fees to provide transparency and to ensure customers are always aware of what the additional cost will be where they use a credit card," a Qantas spokesman said.

The company argues its collections are lower than the costs they incur by accepting credit cards and that most credit card sales have "higher than average merchant service fees".

The Qantas spokesman said the airline offered other payment options that did not attract credit card service fees, such as BPay through their website or cash for Eftpos when booking through travel agents.

Steve Burns, commercial director of Tiger Airways Australia, said the $6 flat rate it charged for domestic flights was industry standard and covered fraud protection and bad debt.

However, Choice spokesman Christopher Zinn said the airlines were profiteering.

"We think it's fair for there to be some cost ... but it shouldn't be a profit centre," he said.

Mr Zinn said flat rates, particularly for cheap domestic flights meant customers were paying far too much.

He suggested a flexible rate based on the cost of the flight would be more appropriate.

"There's even a number of large online organisations such as Amazon who don't charge anything for credit card transactions, so why can't the airlines do it?"

The standard rate for a Mastercard transaction is 0.86 per cent, yet customers often paid up to six times that rate, the Choice report said.

With AAP