Ryanair, easyJet and other airlines must no longer change customers for paying by debit card, the Office for Fair Trading has ruled.
Credit card charges will also have to be made clearer to customers when booking online or over the phone, which has been criticised for inflating the costs of holidays.
Airline, ferry and rail passengers typically have to click through up to six pages of an online booking before the charge is added to the price. Now they must establish charges immediately.
The UK watchdog said that consumers paid an extra £300 million for their travel in 2009 as a direct result of card surcharges.
These charges had become a major source of ancillary revenue for budget airlines, with the likes of Ryanair and easyJet steadily hiking their charges over recent years.
Ryanair, for instance, charges £6 per passenger, per leg of each journey if they book on either debit or credit card, meaning that a family of five are landed with a booking fee of £60 on a return flight. However Monarch has recently removed its debit card fee.
Ryanair claims the charge is not for processing the card but an “administration fee”, but the OFT said for most people this fee was “compulsory”.
Airline Easyjet charges a surcharge of £8 for payments by debit card and £8 plus 2.5 percent of the total transaction for credit card users, the OFT reported.
However, the OFT said credit card charges could continue, but only if they were made far clearer to customers and stated immediately below the headline price or “one click away” on a web page. “We don’t want people find out about the charge after they have spent ages filling in their passport number and luggage details,” said an OFT spokesman.
Ryanair said that customers could avoid the fees by using a pre-pay card, a form of payment that does not have the same legal protection as a credit card and which often comes with a monthly fee.