'Rip-off' surcharges for card payments to be banned

"Rip-off" surcharges on customers who pay with credit or debit cards will be scrapped from the beginning of next year, the Government has announced.

The new rules will ban companies from charging up to 20% more for paying with a credit card.

The extra charges are commonly added to purchases such as flights and gig tickets.

Some convenience stores also issue a 50p charge when customers are paying by card.

Businesses usually say the surcharge is to cover the cost of processing a card payment.

The total value of surcharges for debit and credit cards was an estimated £473 million, according to Treasury figures.

The move will spell the end of "nasty surprises" for customers using a card at the check-out, said Economic Secretary to the Treasury Stephen Barclay.

The rules will also tackle surcharging by local councils and government agencies such as the DVLA.

Mr Barclay added: "Rip-off charges have no place in a modern Britain and that's why card charging in Britain is about to come to an end.

"This is about fairness and transparency, and so from next year, there willbe no more nasty surprises for people at the check-out just for using a card.

"These small charges can really add up and this change will mean shoppers across the country have that bit of extra cash to spend on the things that matter to them."

The government has previously capped the costs that businesses face for processing card payments and said it will will engage with retailers to assess if there is any more that can be done to help.