In the U.S., airlines don’t typically charge a fee for using a credit or debit card to purchase a ticket. (Allegiant is an exception, by charging a $14.99 “convenience fee” for online bookings with credit card payment. Other U.S. airlines have tried, but failed thusfar.)

In Europe, a credit card fee is more of a norm. But Ryanair, which has been charging a fee for years, was just slapped down by the German courts for charging the fee:

Germany’s federal court of justice found yesterday that Ryanair placed consumers at a “disproportionate disadvantage” by offering no way to pay for flights without incurring a fee.

“By charging the fee is shifting in a one-sided manner on to customers the costs of fulfilling its own legal obligations … without bringing any service in return,” said the court, a practice at odds with German law.

The case against Ryanair was brought by Germany’s leading consumer organisation. It complained about the fee, which ranges from €1.50 to €4 per flight and passenger.

By not accepting cash payments, it argued, Ryanair offered customers no opportunity to pay for flights without paying extra.

I can understand the motivation behind this fee: Merchants accepting credit cards give up a piece of each transaction to the credit card processing bank. (The percentage varies according to card brand and total transaction size.) But there are rules to which merchants are required to adhere. I couldn’t find a European merchant agreement. But in the US, for example: “Visa merchants are not permitted to establish minimum transaction amounts, even on sale items. They also are not permitted to charge a surcharge fee when you use your Visa card.”

It will be interesting to see if other European countries see similar cases. Credit card fees aren’t limited to Germany, after all.

Checked baggage fees are perhaps the most hated of the current round of fee hikes, but Delta has figured out a way to make the fees more palatable… for some. The airline’s marketing team has linked Delta Amex card membership with checked baggage fee waivers:

Starting June 1st, Cardmembers with a Gold, Platinum, or Reserve Delta SkyMiles Credit Card from American Express—and up to eight travel companions within their reservation—will automatically receive a first checked bag fee waiver upon check-in for all Delta and Delta Connection® flights.

This only applies to general members of the SkyMiles program, of course, since elite-level members are already waived out of paying the baggage fees — for two bags.

Assuming a single checked bag, checked both ways on a roundtrip, Delta Amex holders would save $50 per person on the itinerary. (Up to eight travel companions?! Big crowd. But that could work out to quite a savings.)

The cards charge annual fees — the gold, platinum, and reserve cards charge an $95, $150, or $450 (!) annual fee, respectively — but if you’re not an elite member of SkyMiles and you’re going to be traveling with Delta (and checking bags) anyway, it may be worth signing up for a card.

As much as I am an advocate for point-earning credit cards, sometimes there are more important considerations than your kickback.

One argument I’ve made on several occasions (such as here), is that international travel is a time to choose your credit card on the basis of fees, rather than rewards. (Ideally, you can get both, but most rewards cards slap hefty foreign transaction charges on your account.)

Another consideration is rental car coverage. Because of Visa’s more generous loss-of-use coverage in the case of damage to the car, I always use a Visa when renting.

But another rationale became clearer to me this past week: For expensive items, it can make sense to choose a card on the basis of its purchase protection.

Last week, our home was broken into and burglarized. The thieves took one item: a nearly-new high-end netbook, purchased just a few months ago.

After the police left the house (and after we cleaned up the CSI staff’s fingerprinting dust from our bedroom…) I filed a homeowner’s insurance claim. But I remembered that our credit card might be able to cover a part of it, and that the credit card might have been our only coverage had the computer been lost outside the home.

In the process, I was reminded of the variations between cards:

American Express Purchase Protection will cover the expenses of a lost, stolen, or damaged item if the incident happens within 90 days of purchase, up to $1000 per incident and $50,000 annually.

Visa Signature has a similar product, dubbed Purchase Security, but incidents are limited to $500 of coverage. The $50,000 annual cap still applies.

MasterCard’s Purchase Assurance is also limited to 90 days, but it’s not clear what the dollar limits are. You need to check with your card-issuing bank to see how large the benefit is. (In my own case, Citibank offers $1000 coverage per incident, with a $25,000 annual cap.)

I would rank those 1) Amex, 2) MasterCard, and 3) Visa.

(I remember when these programs lasted an entire year, instead of just 90 days. But times change, and benefits get shaved back.)

The computer that was stolen from me was bought with a Visa, and it isn’t covered, as it was stolen just over 100 days from the time of purchase (the credit card coverage had run out on day 91). Our normal go-to card, our Starwood Amex, or our Citibank MasterCard, wouldn’t have been any more help, given the 90-day limit. But if the crime had occurred a few weeks ago, the Amex or MC would have been the better cards to have used.

But for big purchases, the Visa just went down a notch in my estimation, and the Amex moved up.

Upgraded: The notion of a contract in air travel
Downgraded: Airline logistics
The Department of Transportation has revealed sweeping new rules that govern airlines’ conduct, but implementation and enforcement will not be as easy as passing a new rule. Most headlines read that this is a big victory for passenger rights, with the bulk of the attention focused on a new 3-hour limit on time spent aboard a plane, pushed away from the gate. That’s something but this won’t please everybody. (If your flight would be able to take off 3 hours and 5 minutes after pushback, tough luck, you’re heading back to the gate at the 3 hour mark…) Ground delays suck. No doubt. But There will be unintended consequences, and airlines will find ways to address these logistical challenges.

More importantly, in my view, the rules include a provision that airlines can’t retroactively change the contract governing your ticket. This has always struck me as patently unfair: You buy your ticket in January for a March flight, and the airline changes its rules in February; until now, you’ve been stuck with the February contract. Now, the federal government has ruled that you’re covered by the original contract in effect when you made your purchase. Good.

Chris Elliott has pulled the highlights from the actual rules, if you want to review.

Downgraded: Globespan Airlines
Potentially Downgraded: Credit card processors
Scotland’s Globespan Airlines shut down abruptly over the weekend, stranding 4500 travelers mid-trip. For the time being, guidance from the company on rebookings, is available on the former airline’s website. But questions now turn to whether or not the airline’s credit card processor was to blame for the immediate death knell. The processor, E-clear, apparently held back between £30m and £35m due to Globespan. You may recall that Frontier Airlines blamed their credit card processor when they declared bankruptcy in 2008 (though they didn’t halt all operations at that point).

Upgraded, after days of being Downgraded: Eurostar
English Channel rail firm Eurostar had a miserable (and well-publicized) weekend, with a complete shutdown of all their trains, midway through the Channel crossing. And the company handled things rather poorly. For example:

When worried passengers [aboard the trains] challenged Eurostar officials they received a cursory shrug. Some became so desperate for information that they banged on the train driver’s door but could only hear him sobbing inside.

Awesome. That’s the kind of leadership in a crisis I look for… But the company is resuming service and has promised to make it up to the thousands of passengers it stranded, not just in the tunnels, but on both sides of the channel. They’ve vowed that “the company would reimburse them for expenses incurred while they were stranded.”

Upgraded: The number of stars in the Parisian hotel sky
Four stars? Not enough. Bring on the fifth star. At least they haven’t gone the way of the absurdist 6 and 7 star hotel…

Upgraded: Biofuels
A Seattle company has put in motion plans to create a large-scale biofuels operation aimed specifically at airlines. AltAir Fuels has signed up 14 airlines to be launch customers for jet fuel and diesel made from camelina, a mustard-like weed whose seeds can be refined.

Downgraded: The view on AirTran
While US Airways has long had ads on the tops of their tray tables, which you only see if you pull the tray down, AirTran is going a step further and pasting ads on the undersides — the side you see during takeoff and landing, when those traytables are in their “upright and locked position.” The Ryanairification of American air travel is nearly complete. Stay classy!

Downgraded: Premium seats on Qantas
Qantas is cutting the number of premium seats. No surprises there.

Upgraded: A380 first class seats
The Global Traveller has flown the A380 on Singapore, Qantas, and Emirates, and offers a comparison of all three products. Well played, sir. Well played.

Downgraded: Airbus A380, not so premium
In direct contrast to the previous item, how about an A380 equipped with 840 seats? Air Austral, which travels between La Réunion in the Indian Ocean and Paris, has ordered two single-class A380s, jam-packed with passengers.

Upgraded: Tokyo
Forget Paris, New York, San Francisco, London, Chicago… Tokyo gets the nod for the city with the most top Michelin-starred restaurants.

Downgraded: Flying into de facto lava fields
Horrible event, but a great headline: “Plane Misses Runway, Lands in Lava“… The accident occurred in Goma, Congo, where the runway was cut in half by the lava flow from a 2002 volcanic eruption. Apparently, there were a few injuries, but thankfully no deaths.

Downgraded: Amex cards’ point/mile programs
Want to earn the miles or points from an affinity credit card purchase? Be sure to pay the bill on time. American Express is withholding the points if the cardholder doesn’t pay the bill by the due date. Customers forfeit the points, unless they pay a $29 reinstatement fee, in addition to late charges and interest. This isn’t just Amex: JPMorgan Chase has a similar policy with their United Visa. Expect this to be the norm. And try to pay that bill on time.

Upgraded: Your ability to earn lots of British Airways miles
Chase and British Airways have launched a pretty amazing airline mileage-earning credit card offer. 50,000 BA miles after one purchase, then 50,000 more after spending $2000 within three months. Gary Leff has thought this through and come up with a scheme for 420,000 miles between two people. That’s a lot of free tickets for a $75 annual fee.

Downgraded: Track suits
A Best Buy executive says that United refused him an upgrade because he was wearing a track suit. “United says there is no passenger dress code, but they cited two rules. Ticketed passengers can not be barefoot and must be clothed.” Standards!

Upgraded: Fees for Expedia phone bookings
Expedia announced that it was dropping the booking fees it charged for booking any flight, car rental, hotel or cruise on the phone. As online agencies compete to attract customers, this is the latest fee to drop. Yay, lower fees! Priceline immediately tweeted that they had never had phone booking fees. Nyahh.

Upgraded: Responsibility for rental car reservations
Avis Budget Group has worked with global booking systems to prepare their networks for an eventual introduction of no-show fees for car rental bookings. Frankly, I’m amazed that this is a fee that hasn’t been enforced more widely already.

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