Got a prepaid travel card? You may soon be charged a £2/mth fee if you've not used it due to the pandemic
If you've got a prepaid travel card you may be hit with a £2 monthly fee if you haven't used it in over a year, which could impact many given the coronavirus pandemic has largely scuppered travel plans since March 2020. Here's what to watch out for and what you can do to avoid being hit by charges.
MoneySavingExpert.com research has found three prepaid travel card providers that charge customers an 'inactivity fee' if they go a year without using their card - and there's still money left on it. Another charges customers after three years, and a further card levies a fee after four years. So if you haven't been abroad for coming up to a year, it's worth checking if you have one of these prepaid cards with cash still on it.
Our warning comes as all but essential travel continues to be banned across the UK - see our Coronavirus Travel Rights guide for the latest. You can also read our Prepaid Travel Cards guide for more info on how these cards work and the current best buys.
Three major travel card providers charge an 'inactivity fee' after one year
The below table explains which major prepaid card providers charge an inactivity fee, when this kicks in, how much it costs, and how to avoid being stung. But crucially, you'll only be charged an inactivity fee if there are still funds on the card - if there's no cash on the card the fee won't apply.
Provider | Inactivity fee? | When does fee kick in? | How can you avoid it? |
|---|---|---|---|
FairFX | Yes - £2/mth | Card expires three years after you get it and the fee kicks in then | - Ask FairFX to replace card with new prepaid travel card, then move balance to new card (free) - Withdraw entire balance via ATM (£1 fee) (1) |
ICE | Yes - £2/mth | One year after card last used | - Top-up card (free for foreign currency, 2% fee for £s) - Make a transaction in the UK or abroad (free) - Make an ATM withdrawal (£1.50 fee) (2) - Ask for cashback in store (fee varies depending on store) - Move money in to your current account by contacting ICE (free) |
Post Office | Yes - £2/mth | Card expires three years after you get it but fee won't kick-in for another year | - Ask Post Office to replace card with new prepaid card, then move balance to new card (free) - Withdraw entire balance via ATM (max. daily cash withdrawal limit of £300 and a fee of 1.5% - min £3, max £50) (1) |
Revolut | No inactivity fee | ||
Travelex | Yes - £2/mth | One year after card last used | - Top-up card (free for foreign currency, 2% fee for £s) - Swap card's currency for another (free) - Make a transaction in the UK or abroad (free) - Make an ATM withdrawal (free 'for the duration of the coronavirus pandemic') (2) |
Transferwise | No inactivity fee | ||
WeSwap | Yes - £2/mth | One year after card last used | - Swap card's currency for another (fees apply, see WeSwap's website) - Top-up card (free) - Make a transaction in the UK or abroad (free for the currencies listed on WeSwap's website) - Withdraw via ATM (2.5% fee for withdrawals of £250+ per month, fee-free under this) (1) |
Inactivity fees only apply if there's a balance remaining on the card. (1) With FairFX and Post Office, if you make a withdrawal you need to request ALL of your money back - rather than just a partial sum - to avoid the fee. (2) With Travelex, We Swap and ICE, however, you can make a partial withdrawal to reactivate the card and avoid the inactivity fee.
It's unclear why some prepaid card providers charge an inactivity fee, but the providers in question generally all told us this is clearly detailed in their terms and conditions, so customers should be aware.
WeSwap added that it also sends warning emails to customers one month before the inactivity fee is first applied, whilst ICE said it encourages customers who have a balance on the card to spend it or withdraw it to avoid being charged the inactivity fee.
Travel debit or credit cards may be better than prepaid cards
When travel is allowed again in future, if you don't want the worry of being hit by an inactivity fee by your prepaid travel card provider, it may be worth considering a travel credit or debit card instead.
They're often less of a faff as you don't have to load the cash before you go and MoneySavingExpert.com's top picks consistently offer near-perfect exchange rates every day of the week.
Plus, if you're using a travel credit card for a purchase costing between £100 and £30,000 (even abroad) you'll also get section 75 protection, under the Consumer Credit Act, which means your card provider is jointly liable if something goes wrong with the goods or service you've paid for.
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10 December 2024
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