Customers losing out on travel company branded prepaid currency cards

One of the fastest growing ways of taking your money on holiday is the prepaid currency card, and you will see them recommended frequently as the most cost effective way of spending your cash overseas.

Companies that are well established in the travel industry are taking advantage of this popularity by launching their own brand of prepaid cards and are using them to generate more revenue.

The problem is that some airlines as travel agents are making excessive profits by encouraging their customers to take out a prepaid currency card when they are booking their flight or holiday.

The way they do is by pushing the cards as a great spending solution while abroad but then cash in by charging higher fees for usage than some major credit and debit cards as well as offering lower exchange rates than can be found elsewhere.

Check the T&C’s with a fine tooth comb as there will also often be hidden charges that they don’t tell you about. Sales reps are encouraged to sell currency cards to you when booking your holiday for commission but they are rarely competitive.

Key Findings;

Ryanair are amongst the worst offenders, charging 5.75% above the market exchange rate on every transaction abroad as well as above average ATM fees.

Travel Agents are offering worse rates when you load their card in store compared to loading the same card online.

Travel Agents own branded cards contain hidden inactivity fees and worse exchange rates than some credit and debit cards, Thomas Cook and Co-Op Group being the worst offenders.

Research by currency specialist FairFX.com, a leader in the prepaid currency card market, reveals that some companies own branding cards are charging up to three times the amount to use their cards abroad than the market leaders.

Ian Strafford-Taylor, CEO of FairFX says “Whilst savvy customers will get online and compare rates on prepaid cards, some are falling into the trap of taking a currency card from their travel agent or airline when booking. Some of these reputable brands are charging customers well over the odds for what should be a way of saving money on their holidays.”

EURO PAYMENTS

GBP-EUR spot rate : 1.261

Card: FairFX

FX Fee: 1.40%

ATM Fee: £1.00

€1000 average spend cost: £805.28

Saving with FairFX (£) 0.00

Card: Caxton

FX Fee: 2.75%

ATM Fee: £0.00

€1000 average spend cost: £815.45

Saving with FairFX (£) £10.16

Card: Thomson

FX Fee: 3.00%

ATM Fee: £1.50

€1000 average spend cost: £819.05

Saving with FairFX (£) £13.77

Card: Thomas Cook Cash Passport

FX Fee: 5.75%

ATM Fee: £1.50

€1000 average spend cost: £842.90

Saving with FairFX (£) £37.62

Card: First Choice

FX fee: 3.00%

ATM Fee: £1.50

€1000 average spend cost £819.05

Saving with FairFX (£) £13.77

Card: Co-Op Cash Passport

FX fee: 5.75%

ATM Fee: £0.00

€1000 average spend cost: £841.40

Saving with FairFX (£) £36.12

Card: Ryanair Cash Passport

FX fee: 5.75%*

ATM Fee: £2.00

€1000 average spend cost: £843.40

Saving with FairFX (£) £37.62

*FX dropped to 2.5% during summer sale will return September 30th

We also found that loading a Thomas cook prepaid card with 1,000 Euros in store would cost you around £12.50 more compared to loading it through their website.

When using a Travel Cash Passport, If you load the card with 1,000 Euros at Travelex Heathrow terminal, it will cost you £69.71 more expensive than loading it through their website.

*Average spend cost is based on two ATM withdrawals and the rest of transactions being point of sale.