Brand new way to avoid Ryanair fees

Ryanair is famous for charging huge card fees on its flights. Is there finally a way to avoid them?

Ryanair is bringing out its own pre-paid card which allows you to purchase flights without paying any card fees or charges.

The ‘Ryanair Cash Passport Card’,* which is set to launch in November, will enable Ryanair customers to avoid the controversial £6 card fee Ryanair currently levies on each passenger on each leg of its flights. (At the moment you can use a UK pre-paid Mastercard to avoid these fees, but from November, even these cards will attract the £6 fee.)

So using this new card to buy Ryanair flights will save you £12 in card charges per return flight per person - meaning a family of four would be a massive £48 better off when buying Ryanair return flights.

Sounds great, doesn’t it?

Erm, hold on a second. This is Ryanair we’re talking about. There’s got to be a catch, right?

Wrong. There’s isn’t a catch. There are five.

Catch #1: Pre-paid cards aren’t protected by the FSCS

Soon after Ryanair made its announcement, the Financial Services Compensation Scheme (FSCS) took the unusual step of highlighting the fact that it doesn’t cover something. Namely, pre-paid cards.

“Pre-paid cards work like pay-as-you-go mobile phones, allowing consumers to load the card with cash which then use to make purchases,” explained the FSCS spokesperson, Mark Neale.

“People who are considering getting one should be aware that they are not covered by the FSCS. That means that if the provider goes bust then cardholders will lose all of the money on the card and will not be eligible for protection.”

The message is clear: load money onto the Ryanair card, and you’re taking a risk that the card provider will go bust.

This is important to bear in mind because the minimum amount you can load onto the card is £150.

Catch #2: The transaction fee

Most pre-paid cards charge a transaction fee every time you make a purchase on the card, and the Ryanair Cash Passport is no exception to this rule.

From April 2012, you will be charged 50p for every transaction you make using the card - except for transactions made on Ryanair.com itself.

But let's look on the positive side. Despite this fee, it’s totally free to use the card to buy Ryanair flights. Hurrah!

So this means you can get the card purely to buy flights with Ryanair, and be quids in - right?

Wrong. Please see Catch #3...

Catch #3: The inactivity fee

If you don’t use the card for six months, you will be charged £2.50 as an ‘inactivity fee’. This isn’t a one-off charge either - six months later, if you haven’t used the card, you’ll be charged £2.50 again.

Don’t think you can get around it by spending the exact amount of money you've loaded onto the card, either. Even if the card has a zero balance, the £2.50 fee will still be applied to the card after six months of inactivity, and this fee will need to be paid before you can load more money onto the card to buy flights again.

What's more, if there's a negative balance on the card, Ryanair will charge you a whopping £10 fee as a punishment.

Catch #4: The ATM withdrawal fee

To avoid this ‘inactivity fee’, you could load the card with the minimum of £150 (which is free to do and counts as an ‘activity’). Then you could, in theory, withdraw the money you’ve loaded onto the card using an ATM.

Except that’s when you run into Catch #4. Every time you use the card to withdraw money from an ATM, Ryanair will charge you a £2 fee. Alternatively, if you want to get the cash out via 'Card Services' into your bank account, you'll pay £6!

Catch #5: The card purchase fee

OK, so what if you load the card up with the minimum amount of £150, spend the money on Ryanair flights within six months, then cancel it? Then get another card when you need it for another flight?

That's when you run into Catch #5. When you apply for the card, you will have to pay a £6 ‘card purchase fee’.

The good news is, this £6 will be reimbursed to Ryanair passengers with a £6 travel voucher, for use against Ryanair flights. However, it is not clear whether you would be issued with a voucher twice.

How can I avoid all these charges?

Assuming you want to fly with Ryanair, a simple way to avoid the charges is to load £150 onto the card every six months. This counts as 'activity' and won't cost you a penny. However, I wouldn't recommend this due the risks associated with loading money onto pre-paid cards, never mind the fact that you won't be earning any interest on your money and you have to pay a fee both to spend on the card and get your cash out.

Other than that, the only way to avoid the fees is to use the card exclusively to make bookings with Ryanair, and to book flights worth £150 with Ryanair at least once every six months.

That might seem to eliminate a lot of people, but let's be fair to Ryanair: the airline claims 28% of passengers fly with it at least two or three times a year. This card is very good news for these customers. No doubt if you are among them, you will be applauding Ryanair for launching this card, and you know what? For regular flyers and families, there’s no question this card is huge step forward, and should provide a significant saving.

For the rest of us who want to fly with Ryanair, however, I think it will be impossible to side-step all these charges. But, despite this, you’re still likely to be better off booking Ryanair flights with this card than without it. You simply have to resign yourself to the 50p fee for transactions, and make a note in your diary to spend some of the money you've put on the card in this way once every six months.

It will take three years before this strategy costs you the same as booking a single flight on Ryanair with any other card. A family of four booking return flights would have to wait 24 years!

If you do decide to go for this card...

Be careful. Believe it or not, there are other fees associated with this card, and Ryanair has been known to change its mind about its fees in the past. So please read the terms and conditions carefully before applying for this card.

What do you think?

What do you think of this card? Are you planning to take it out? What do you think of Ryanair in general? Let us know your thoughts using the comments box below. 

*The Ryanair Cash Passport has no connection with the Travelex Cash Passport, despite the similarity in names.

Thanks to lovemoney.com user jjtwins for help with this article.

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