SNEAKY “inactivity” fees charged by prepaid currency card providers could deplete a customer’s entire balance without them realising.
A survey for The Sunday Times by the personal finance website Moneycomms revealed that 7 out of 14 prepaid cards charge monthly activity fees of £1 or £2. They start charging when the account has been inactive (no withdrawals, purchases or top-ups) for 12 months, although Thomas Cook levies it after 15 months.
A prepaid currency card is an increasingly popular way to spend money abroad. They are typically cheaper than using your usual UK bank account, and work in the same way as a debit card. However, extra fees such as applying for a secondary card, or for not using it for a year, can eat into balances.
Providers such as My Travel Cash do not alert customers that an inactivity charge is about to be applied. One reader was caught out by the firm, which charges €2.50 (£2) a month for a euro card. She found out when she logged into her account and saw that her balance was nil.
Andrew Hagger at Moneycomms said: “It’s probably a nice revenue stream for card providers as many customers will be unaware of this stealth fee until it’s too late.
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“It should be mandatory that customers are advised one month before the first inactivity fee is taken so they can either reload or close the account.”
Providers that do not charge inactivity fees include Caxton FX, FairFX, Virgin Money and ICE.