Ryanair credit card fees warning

Travellers who use a new Ryanair-branded pre-paid credit card will be able to reclaim the airline’s online booking fees – but will be charged for other purchases made on the card, and will not receive the level of protection offered by other credit cards.

The budget carrier is believed to be included in an ongoing investigation by the Office of Fair Trading into surcharges by airlines for card payments. Chief executive Michael O’Leary has announced that the airline will continue to apply its £6 “administration fee” to all passengers who pay for flights using cards other than the Ryanair Cash Passport card.

Booking charges will still be added to the bills of customers using the card, but cardholders will then receive a voucher equal to the sum they paid in charges, which can be redeemed on future Ryanair bookings. However, the card itself carries a number of additional fees. It costs £6 to buy, and charges a £2 fee for withdrawing cash at ATMs and a 50p charge for all other card transactions except Ryanair bookings – plus an inactivity fee of £2.50 if the card is not used in six months.

Airline ticket buyers are estimated to have spent £300m on booking fees last year and airlines including EasyJet and Lufthansa’s BMI are being investigated by the Office of Fair Trading over surcharges for accepting debit and credit card payments.

Since the OFT investigation began, one carrier, Monarch, announced that it would remove its debit card fee and cut credit card charges. But other airlines reacted more aggressively. EasyJet increased its fees for debit cards from £5.50 to £8, and raised credit card fees from £8 to £12.95 in April. Ryanair charges £6 per person, per flight, for all bookings made.

Critics have pointed out that the fees do not fairly represent costs incurred by airlines. Processing debit cards typically costs less than 50p, and credit cards between £2 and £3.

In the past, Ryanair allowed customers to avoid booking fees by using an Electron card. This was then changed to a prepaid MasterCard, and will now be limited to the Ryanair Cash Passport card.

Ryanair fare prices are expected to rise by 12 per cent this year.