Money

The UK is banning credit card fees to save citizens ‘millions a year’

Credit card coffee purchase
Tim Robberts | Getty Images

U.K. credit card users are about to get a break that could save them millions.

"All extra charges added to payments for goods and services made by card are to be outlawed, ending a 'rip-off' that costs Britons hundreds of millions of pounds a year," reports The Guardian, writing that the loss to consumers amounted to an estimated £473 million in 2010. Right now, many merchants and government agencies alike can charge consumers more for the ability to pay with plastic.

The changes will go into effect January 2018.

Surcharges and "convenience fees" — such as the extra dollar or so a movie theater charges you to buy tickets in advance with a card, and the 2.9 percent plus $.30 merchants must pay for each digital sale they make via PayPal — are still common in the U.S. That's thanks to regulations that allow sellers to charge customers who pay with credit a surcharge to account for processing and merchant fees, according to The National Conference of State Legislators.

477981449
Johnnie Davis | Getty Images

So, in addition to having to pay to withdraw cash from many ATMs using their debit cards, American customers must at times pay extra for both in-store and online credit card transactions.

Fees can vary by state. In California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Puerto Rico and Texas, laws forbid merchants from adding surcharges on credit card transactions, the NCSL reports, which adds that legislators in California and New York are challenging that law.

California, Colorado, Connecticut, Maryland, Massachusetts, Nevada, Oklahoma, Puerto Rico, Washington, Wisconsin and Wyoming allow sellers to give discounts in an attempt to encourage buyers to pay in cash, the NCSL report states.

A customer signs for a purchase with a chip credit card at a Wal-Mart location in Burbank, California.
Patrick T. Fallon | Bloomberg | Getty Images
A customer signs for a purchase with a chip credit card at a Wal-Mart location in Burbank, California.

CNBC's Tom Anderson reports that ATM fees are also on the rise.

On average, ATMs charge around $2.90 for out-of-network customers to withdraw any amount of money, according to a Bankrate survey. That's in addition to the $1.67 customers pay their own bank for using a non-affiliated ATM. The total comes to at least $4.57 for every out-of-network transaction.

"The fees on fees mean that if you withdraw $20 from the average out-of-network ATM, you would pay 22.9 percent of that money in bank charges," Anderson says.

But there are a few ways to avoid paying extra.

Mobile-banking apps can help you locate in-network ATMs. Or, "if you don't want to hassle with finding an out-of-the-way ATM in your bank's network, you can get cash back by using your debit card for purchases at the grocery store and pharmacy," Anderson says.

Consumers could also, like Mark Cuban, avoid plastic altogether, using cash for smaller payments or writing checks for larger ones.

Like this story? Like CNBC Make It on Facebook.

Don't miss: Mark Cuban: 'Don't use credit cards'