Virgin hits passengers with 30% credit card surcharge rise

VIRGIN Blue says it does not expect the ''modest'' 30 per cent rise on its credit card surcharge to turn people off booking flights with the airline.

Virgin Blue increased its credit card surcharge for domestic flights by $1 to $4.50 per passenger per segment just before Christmas.

It was the first increase in 18 months and was effective from December 21.

The fee applies to tickets booked on Virgin Blue, Pacific Blue and Polynesian Blue, and the surcharge for international flights went up by $1 to $7.

On December 1, Qantas's credit card surcharge for international flights increased 20 per cent to $30, from $25. The fee for domestic flights was unchanged at $7.70 per passenger per booking.

A recent investigation by consumer group Choice on credit card surcharges found airlines were among the worst offenders in terms of the high cost of those fees. Choice spokesman Christopher Zinn said he could see little reason for Virgin Blue's recent hike, given the cost of processing credit card transactions - known as the merchant service fee - was coming down.

While all Australia's major airlines offered alternatives to pay that did not impose a credit card surcharge, Mr Zinn said these were neither ''widely known or used''.

Mr Zinn also said the flat fee used by most Australian airlines was unfair as ''people on the cheapest fares cross-subsidised those people on the more expensive fares''.

AAP