CARD charges which result in millions of customers being fleeced will be consigned to history, after ministers acted to end these "unfair fees" for millions of people across the country.
The new rules to come into play in January will ban companies from charging for purchases such as flights just for paying with a credit card.
The development has been welcomed by UK Finance, the banks and finance trade body which said it was "right that consumers who want to pay with cards will not have pay extra fees to do so".
The surcharges are commonly levied by businesses ranging from takeaway apps to global airlines on customers who pay by card or use other services such as PayPal.
The charge to pay using plastic was, as of last year, supposed to be no more than around 0.6 per cent of the purchase price.
But a study by Fairer Finance last year found that firms were often charging as much as three per cent.
On a long haul holiday, where a family of four might spend £4,000 on their flights - they would still be hit with up to an extra £120 for paying by credit card with a three per cent levy.
The ban would mean that firms will save billions of pounds in fees they pay to banks when their customers pay by card – which should be passed on to savers by cutting the amount they charge for card transaction.
The rules will also tackle surcharging by local councils and government agencies such as the DVLA.
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.
Profiting from card fees is forbidden by the Consumer Protection Regulations 2012, which state that companies are only allowed to charge customers for the costs they have incurred.
Economic Secretary to the Treasury, Stephen Barclay, said: "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 will be 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."
It is understood the Association of British Travel Agents have highlighted to the Treasury the negative impact a ban will have on the travel industry.
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.
A "super-complaint" by consumer watchdog Which? six years ago over unfair surcharges was upheld by by the Office of Fair Trading (OFT) which agreed that things needed to change.
Gareth Shaw, Which? money expert, said: "This welcome news is long overdue. Which? has been campaigning for an end to unfair card surcharges for years now, and triggered the process of reform with our super complaint back in 2011.
"Previous action to protect consumers from excessive card surcharges has been difficult to enforce, leaving consumers paying over the odds just for paying by card. These new rules will finally put an end to this unfair practice."
And Guy Anker, managing editor of MoneySavingExpert.com, added: “Scrapping card surcharges is good news for the millions of consumers who would otherwise have been milked by companies who whack on unexpected charges at the end of the process – something that has been happening for years. “With many feeling the squeeze in the cost of living, people shouldn’t be hit with unexpected fees."
Richard Koch, head of cards at UK Finance said: "Ending the practice of surcharging is great news for everyone who uses a card and we are pleased these measures will soon be in place."
Many companies reduced credit card fees two years ago as a result of new European rules which significantly reduced charges by capping so-called "interchange fee", which is largest part of the cost.
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