Passengers wanting to avoid the extortionate card handling fees charged by Ryanair will now have to use Ryanair’s own Cash passport from 1 November onwards. This further restricts the payment options for people who don’t want to pay these fees, as up until this date, any prepaid MasterCard was acceptable. So how does the Ryanair Cash passport compare with other cards? Many people have been quick to criticise the outrageously high foreign usage fees (5.75%) this card has, or the £2.50 monthly inactivity fee, but both of these are easily avoidable. Consumer group Which has also dismissed this card, saying that they would rather wait for the day when the government bans airlines from charging extra fees for paying by debit card. That might be something many consumers would welcome, but until (and if) it happens, people will still want to find out the best way of paying for their flights.
To start using the card, passengers must transfer at least £150 in funds, and pay a £6 card activation free, which is refunded in Ryanair travel vouchers (no further fee for using these). The Ryanair Cash passport is managed by Access prepaid worldwide, a subsidiary of Mastercard.
Passengers book flights in the normal way, but unlike all other payment methods, they will not incur any handling fees for flights booked using this card. The card can be topped up online using a UK debit card, and there is no fee for this, and unlike some other prepaid cards, there is also no monthly usage fee, providing the card is used at least once every six months.
Usage
After first of April 2012, transactions using Ryanair’s Cash passport in the UK will attract a fee of 50p. A non-usage fee of £2.50 will be applied if the card is not active for a period of six months, much to the consternation of many Internet commentators. However, these comments are misguided. Many prepaid MasterCards have a monthly usage fee, which applies whether you use the card or not. All you have to do to avoid any ongoing fees were the Ryanair Cash passport is just make sure you use the card in the UK at least once every six months. That sounds reasonable to us.
Foreign transactions
Again, much of the criticism at the Ryanair Cash passport has been because it attracts a whopping 5.75% transaction fee for any usage abroad. Sure, this is outrageously expensive, but the whole point of having this card is to avoid Ryanair’s extortionate card handling fees, not to get the best rates on using your card abroad — something which is also highly unlikely that your bank will offer anyway. The Ryanair Cash passport is denominated in Sterling, not in euros, so, like Sterling travellers cheques, it makes little sense to expect to use this abroad anyway, as there are plenty of much better value cards available which are denominated in euros, so you know exactly where you stand in terms of costs.
Are there are other ways of avoiding Ryanair’s extortionate card handling charges?
Ryanair vouchers
Don’t be fooled into thinking that the Ryanair voucher is one of them. Firstly, you will have to pay a £5 administration fee to buy the voucher, which is only £1 less than the usual card fee. Vouchers can only be used once, so if you’re booking flights which cost less than the value of the voucher, you will lose the difference. If your flights cost more than the voucher value, then you will have to pay the difference, and unsurprisingly this difference will then attract the very handling fees you are trying to avoid. So in that respect, the voucher is lose-lose.
The vouchers can only be used by the named beneficiary, so that they are much less flexible than a prepaid MasterCard which can be used to book flights for anyone. However, there is one potential advantage of paying by voucher, and that is that a handling fee is only levied once for the cost of the voucher, whereas Ryanair’s credit card booking fees are levied on each individual flight sector, so a couple making a return trip will have to pay four times. This theoretically makes the vouchers a better way of paying than a credit or debit card, but you would still have to predict the exact cost that your Ryanair flights are going to come to in order to make the vouchers worthwhile, and this can be extremely tricky as the yield management system used by Ryanair and all other low-cost airlines means that prices can rise and fall at a moments notice. Why go to all this trouble, and still pay a handling fee, when you can avoid a handling fee using Ryanair’s Cash passport?
Of course, we’d hate to live in a world where every single corporation dictated the rules of how you pay them, but luckily very few companies behave like Ryanair. As long as Ryanair’s business model makes it possible to explore all kinds of unique corners of Europe at a cost which is often many times cheaper than their rivals, then this hassle is something that will be worth tolerating.
What about the Ryanair credit card?
The Ryanair credit card, managed by Santander bank, promises to reward users with up to 5 return flight vouchers during the first year. Users must still pay all applicable taxes fees and charges for the flight they wish to take, and unlike Ryanair vouchers, payers by Ryanair credit card will still attract a handling fee of six pounds per person per flight sector, which is no different to payment by any other card.
So why bother with a Ryanair credit card? The terms and conditions clearly state that these free flights will only available on selected routes, and that there will also be many blackout periods when the free flights will not be available. Considering how many times Ryanair launches special offers, we think that these free flights are of little use, so you might as well just to check for the latest special offers like any other passenger.
From the way we see it, the Ryanair credit card is merely an extension of the Ryanair moneymaking machine, and little benefit to consumers. On the other hand, the Ryanair cash passports let’s Ryanair boss Michael O’Leary paint himself as being the one in the temple, throwing over the tables of the money-changing rip-off banks, who he says are the route cause of his airline charging such high payment fees. Yet the much despised British banks still let you trade with them on your terms – take none of their add-on services and don’t go overdrawn, and they are still free to use. Ryanair meanwhile will continue to dictate the terms on which you do business with it, because for the time being at least, it still can.
Update 6th Oct – the card application page is now live. Note that the card is offered by Raphaels Bank, not Access Worldwide.