Cutting Credit Cards Out Of Travel

How long will it be before we consumers are forced to pay the 2 or 3 percent fee that credit card companies charge airlines, cruise lines and other travel providers? How about now.

United Airlines is requiring some travel agencies to pay the merchant fees that credit card companies charge on each transaction. The agencies, serving mostly business travelers, must pass the expenses on to customers. (For now, United still pays the fees when passengers book directly with the airline or use large online agencies like Expedia, Travelocity or Orbitz.)

This may well be, as David Grossman at USA Today reports, only the beginning. United may try to push the fees onto larger agencies. And if United is successful, other airlines and travel providers are sure to follow suit.

United is at the forefront of what seems to be a general rebellion against merchant fees. Lately I’ve been pushed away from using credit cards in certain non-travel transactions. When I made a purchase at Ikea, I was offered a discount for using an ATM card instead of a credit card. When I paid for a college course, I used an electronic transfer from my checking account to avoid a $17 credit card transaction fee.

The banks and credit card companies have brought some of this on themselves. Widely perceived as the villains in the financial meltdown that precipated the current economic crisis, they’ve responded by putting the squeeze on customers and merchants, both. Add such abusive practices as dynamic currency conversion and bogus foreign transaction fees, and it’s small wonder that buyers and and sellers are wondering why they’re putting up with this avaricious middleman

Yet travelers have few alternatives to credit cards. Carrying large amounts of cash is foolhardy, ATM fees are no gift and travelers checks are awkward and expensive. Checking account transfers can be made online, but they are cumbersome. And only credit cards allow customers to dispute a charge when the merchant fails to deliver.

So credit cards are still with us. And while the conflict might eventually turn us toward less costly alternatives, right now the question is who will pay the merchant fees. I wish I could bet it won’t be us.

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  1. Pingback: Airlines Charging Credit Card Fees To Customers @ Coach Class

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