Other airlines are expected to follow Monarch in scrapping credit card booking fees.
Monarch revealed that credit card charges of up to 3% will be axed from Thursday (December 15).
The reduction will apply to flight and holiday bookings made through the company’s websites or UK based contact centres.
Monarch estimated that the measure will enable a family of four to save £40-60 on their trip, based on the average booking value of a holiday.
Customers can also book using PayPal and benefit from the financial protection provided by credit cards and PayPal for flight bookings.
The “customer friendly” move was designed to put Monarch in an industry leading position, with many other operators still charging customers who book using their credit card. 
However, Virgin Atlantic later revealed that it had dropped its 1.5% fee since the introduction of a new website.
Flybe also said it was looking at cutting the fees, according to the Daily Mail.
Ryanair and Thomas Cook both levy a 2% fee. Thomson currently charges customers 1.5% and easyJet 1%.
EasyJet cut its charge from 2% to 1% earlier this year, and British Airways – which currently charges £5 per ticket – is set to cut the fee to 1% and cap the bill at £20 from Wednesday.
Jet2 was the first airline to cut credit card fees a year ago but still charges American Express customers 3.25%.
The fees have also been axed by international airlines – including United Airlines, Aer Lingus, Air Canada, and SAS.
Monarch chief commercial officer Ian Chambers said: “Going to 0% for credit card bookings means that our customers can get the best value from their flight and holiday bookings – and benefit from the protection that credit cards offer, without having to pay extra for it.”