How to avoid those painful credit card surcharges

How frustrated do you get when you step out for a bit of shopping only to discover on your next credit card statement you’ve been slapped with surcharges?

In May, the Reserve Bank of Australia announced it would crack down on excessive surcharges, which is terrific if you currently use your credit card to pay for flights and hotels, events or even taxis.

What the RBA changes mean is that you will only be charged the actual cost of processing a card payment by the merchant instead of being hit with excessively high costs.

According to consumer watchdog Choice, these changes will “leave more money in our pockets”, with credt card surcharges said to total around $800 million each year.

While the convenience of having a credit card comes at a price, there are ways in which you can avoid paying any surcharge costs entirely when you shop online.

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Here are several options that will help you avoid those nasty credit card surcharges altogether:

  • BPay is probably the most common method you can use to avoid card surcharges, especially when it comes to paying bills. You will be provided with a distinctive BPay number on your bill statement. When you login to your internet or mobile banking service, or telephone banking, you can choose the BPay bill payment option and follow the simple instructions.
  • POLi is a subsidiary wholly-owned by Australia Post and is a real-time online debit payment method. If you have internet banking enabled on your credit card you can choose to pay for flights and much more through POLi, and you won’t have to pay the surcharge when you use this payment method.
  • Consider alternatives. Some taxi companies charge up to 10 per cent surcharge, but others — like Uber — don’t charge a credit card surcharge at all. When it comes to things like paying for flights, many airlines are including the option of Direct Debit to pay for tickets, which would allow you to transfer the cost of your airfare directly into the airline account. It pays to look closer.
  • If you have a PayPal account you can link your credit card to your PayPal to make payments, which gives you the options of saving on credit card surcharges with several merchants.

Are you frustrated about having to pay credit card surcharges? Do you have any tips for avoiding paying more than the purchase price? Share them with us.


Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.