Paying by card just got cheaper as companies are banned from charging any fees for card payments (effective 13 January 2018.)
The new rules state you cannot be penalised for choosing to pay by card, either online or in-store.
Under the old rules, which came into force back in 2013, companies could only charge you what it cost them to process a card payment - they couldn't make a profit on these surcharges.
But consumers still faced hefty charges, with fees typically around 2% and on some smaller transactions accounting for as much as 20% of the bill.
How the rules have changed
The new rules will mean all surcharges are banned. So there will be no charges for paying by debit, credit or prepaid cards. This includes the Prosper² Rewards Card.
The rules apply to any UK company which is selling to UK consumers but the new rules won't just apply to the UK. As this law is following the EU Payment Services Directive, companies across the EU will also be banned from charging these extra fees which is great news if you use your card overseas.
How much will you save?
Historically, cardholders were often charged fees of around 2%, but they could also be charged a flat fee regardless of how much they were spending. Here are a few examples of some surcharges:
- Driver and Vehicle Licensing Agency (DVLA) - £2.50 credit card fee on all transactions
- Council tax - 2.5% credit card fee for Ealing Council
- Flights - Flybe charges 3% on credit card and PayPal transactions
- Packaged holidays - Thomas Cook has a 2% credit card fee
- Paid-for TV - Sky charges a 30p/mth fee on recurring credit card payments
You are likely to make the biggest savings on expensive purchases. For example, if you used a credit card to buy a car or pay a wedding venue, you could have payed 2% on a transaction costing thousands of pounds.
Of course, it is possible some retailers will raise their standard prices to cover the cost of processing card payments - or some could stop accepting cards altogether.
For now though spending on your Prosper² Rewards Card just got cheaper.