Opinion
Paul Keane's picture
Paul Keane

Credit Card Fees and How the Consumer is Paying the Price

Just recently I had to cancel a number of Air New Zealand flights due to being unable to travel on the given dates. It wasn't the airlines fault; it was just one of those unavoidable circumstances. However, when looking at the costs, I became aware of the "extras" that were attached to each fare. In the case of the domestic flights, a "card payment fee" of $6.96 applied per flight and in the case of the International flights, a service fee of $70 applied to the booking.

These booking fees got me thinking as to why I am charged a credit card fee on booking my flight online?

More to the point, how else am I to purchase an Air New Zealand flight other than online or through a travel agent?  Do I pay cash? Improbable, so the only real option in this day and age is to pay by credit card.  For me it opened up a can of worms.  Simply put who gets the financial benefit from the "credit card fee" attached to my booking?  Is it Air New Zealand or a banking system?  Either way it’s probably just another "rort" where the service provider tags the customer.  It goes further than that of course, as we are charged an annual fee by our respective banks anyway for the use of our credit card.  If you let the card run over then you are also charged a fee for "late payment".  It goes on and on.  One assumes that the airline is also charged a fee by the bank, so where does this all end, this "clipping the ticket"

It’s normal when paying your hotel bill at the end of a stay that they charge you 1.5% or 2.5% depending on who the provider is. None of us seem to care we just pay the fee and get on with our lives, but the question is apparent, how are these fees arrived at?  The same applies to booking a concert ticket online, we just pay!!

Extending the discussion, the purchase of "gift vouchers" also poses a threat to consumers.

Not so much the fact that the supplier may go out of business before the expiry date, but the actual use of "gift vouchers" by the receiver. A recent note at the bottom of a Briscoe's advertisement had me intrigued. It stated in the finest print possible “discounts exclude the purchase of vouchers".  Now what does that mean? I would have thought the purchase of a gift voucher entitles the purchaser to use as and when they like up to the point of expiry. Not so it seems. There are obviously limitations on the use as noted in the wording at the bottom of the Briscoe's advertisement.

There is no doubt that it is very much a "buyer beware" on all occasions, particularly in this day and age. That discounted product offered always has a tag, so the eventual price you pay may not be as cheap as you first thought. However, sometimes it is worth the effort to just question that extra surcharge added to the bill. Certainly, the airlines collecting credit card fees for online purchases seems a "steal" for them, but what benefit for the consumer?  If someone could tell me how we can buy an airfare differently and avoid the credit card fee, I would be interested in hearing. 

In a busy life, we all want to enjoy "time".  Cost inevitably becomes secondary, as convenience takes over. But it’s a bit rich when we are constantly "tagged" for hidden costs the detail of which seems to remain closeted!! 

By Paul Keane


Sharewatch | Infratil

Infratil is an “infrastructure” investor, with interests in businesses such as Wellington Airport, Z Energy (formerly), Trustpower and NZ Bus. More recently, it’s been branching out into more ‘residential’ activities: retirement villages and student accommodation.

Infratil bought into student accommodation last year, acquiring 50% of the Australian National University portfolio. In a recent market update, Infratil noted that “this is a major investment sector in the USA, but still in its fledgling stages in Australia and New Zealand and new to most investors”. It’s early days for the investment, but Infratil so far seem quite positive on it.

Infratil announced their full-year results last week, which generally seem positive – with such a diverse range of businesses, the headline measurement becomes “consolidated underlying EBITDAF from continuing operations”, and that rose by 12.4% to $519.5 million.

Wellington Airport “resembles a building site” but “has unveiled a well-received expansion to its domestic terminal”. The airport is seeing strong passenger growth. The RetireAustralia business is “rethinking the form and function of accommodation that is to be built at both existing villages and greenfield projects”, so developing fewer new units in the short term.


In The Press

Local media highlights 15 May - 22 May 2017

F&P Healthcare Shares Rise on Profit Jump

Shares in Fisher & Paykel Healthcare have edged up after the company reported an 18 per cent jump in its annual profit and forecast sales this year could hit $1 billion.

The Auckland health technology firm has had a track record of beating forecasts in recent years.

Source: (Stuff)

Fletcher Building Snaps up Roofing Firm, May Enter Joint Venture

Fletcher Building has bought a New Zealand roofing material manufacturer and may also be eyeing a joint venture in Australia.

Roll-forming company Calder Stewart Roofing, which includes roofers network Roofingsmiths, is to be rolled into Fletcher's Dimond business.

(Source: Stuff)

NZ Risks ‘being left behind’ Over Hotels

New Zealand’s tourism industry risks losing its competitive edge unless the country’s political leaders do more to encourage hotel development, property experts and tourism chiefs warn. 

New Zealand’s tourism boom, driven by the country’s growing international appeal and the expansion of air services, is pushing up demand for hotels across the country.

(Source: NZ Herald)

Alexanders taps into Chinese digital market

Rachel Alexander, owner of Christchurch-based Alexanders Digital Marketing, is helping Kiwi companies break through the great firewall of China.

Unlike the western world's access to Google and social media, China has its own internet companies.

(Source: Stuff)

© RCG Ltd 2012
The views expressed on this website do not necessarily represent the views of RCG Limited or its directors and is intended for guidance only. RCG Ltd accepts no responsibility for parties acting on the material within, or for any omissions and errors. This website is owned by RCG Ltd, you may not reproduce, publish or transmit the articles published on this website in any manner without the prior written consent of RCG Ltd. | RCG Limited, registered architects with the NZRAB since 1989 | RCG Realty Ltd, licensed under the Real Estate Agents Act 2008