So Ryanair have just announced that they will no longer be accepting Visa Electron as a means of payment in order to avoid their £5 card transaction fee.
Does this mean the end of their famous 1p flights, or indeed of any of their lowest price offers, where on any given day it is usually possible to book a flight somewhere on their network for less than £10, without paying any additional charges at all?
Well, unfortunately, it no longer seems possible to get away from these fees completely. Ryanair will still accept fee-free payment for all purchases made using Pre-paid Mastercards, but what they have effectively done is outsourced the fee charging to another provider. I’ve had a look around, and I can’t find any company offering totally fee-free pre-paid cards - why would they - at least banks can find extra ways of making revenue from their customers (sounds familiar?), whereas pre-paid card issuers can only really make money from levying a fee for the card itself, and maybe a few extra pennies by selling on the data.
So what’s the best option? Really depends on how often you expect to fly with Ryanair, whether or not the other airlines will follow suit, and of course - how long this particular loop hole will last. First there was no fee for debit card purchases, then there was only no fee if you paid by electron, and now there is only no fee if you load up a pre-paid Mastercard. But who’s to say they won’t switch their allegiances to Visa come the end of next year?
To Ryanair, this is a clever cat & mouse game of making sure the majority of their customers pay the £5 card handling fee with their bookings. As a one-off charge, this wouldn’t be so bad, but the charge is levied on each sector - yup, that’s £40 for a family of four making a return trip. We might have grown used to extra charges in the airline industry, but there’s something particularly irritating about being asked to pay a fee just for the privilege of spending your money with a company. At least with airport charges, you know the airport is doing something, and with Air Passenger Duty, you know it is a rip-off tax which has nothing to do with the environment, but the money is going to a good cause like bankers’ bailouts. Even when you pay £3 for a cup of muddy coffee, you can at least physically see that you are getting something in return. But shell out £5 just to pay for your booking, and what do you see? Nothing - and we know this transaction only costs the airlines a few pennies to process.
Now I’m not going to say that Ryanair should scrap the card handling fee - we know that it is only by levying these extra charges that they are able to offer the 1p flights in the first place - so all I can suggest is that if you fly with Ryanair regularly, it is worth looking for a pre-paid Mastercard which charges the lowest possible fees. This will depend on your usage levels - look out for:
Pre-paid Mastercard Fees
- Application fee - varies from zero to £29.99 - with corresponding increases in other charges.
- Load fee - avoidable, sometimes by paying in using a particular method.
- Monthly fees - best to avoid if you just want a pre-paid Mastercard for use when making cheap flight bookings.
- ATM fees - shouldn’t be relevant if you are just using this card for flights.
- Foreign fees - note that for some flight bookings, you might be charged in Euros or local currency, especially when booking flight legs to UK airports where you start your journey in another country.
I’ve checked out a few price comparsion tables, the most informative being What Prepaid Card - although as with many of these websites, other options may be available. For frequent Ryanair bookers (especially if you have a habit of booking loads of flights, but not always turning up), the CashPlus Premium account looks like the best deal - pay a one off fee of £29.99, and you can then enjoy free (1p) flights ‘forever’ - or at least until the next change of Ryanair policy.
Less regular users would be better off with The Sun Prepaid Mastercard - a much lower application fee of £6.49, but you will be charged between 50p and £1.50 per booking (2.95% of value within these limits). This is still much more acceptable than shelling out £5 a pop.