FREQUENT FLYER

Spending Miles – check the charges

Now that most airlines comply with rules to show fares inclusive of all taxes and charges, the ‘extras’ have become less of an issue. Unfortunately, they are still very much an issue for anyone buying a ticket with frequent-flyer Miles. Our normal rule is that shorter flights are not ideal for Miles’ redemption since they are often available fairly cheaply for cash and you are not getting proper value. Since taxes and charges have risen at such a fast rate, maybe we should change this advice to ‘be very careful about redeeming Miles for free flights when the additional charges amount to over 50% of the cash price of the ticket’.

For example, the taxes and charges levied by both BA and bmi on a one-way ticket to Amsterdam are around £45. If you are travelling off-peak and book in advance, you can buy a ticket for about £60 (or less) so you are only saving £15 and cashing in a lot of Miles. On the other hand, there will be occasions when there are still frequent-flyer seats available for redemption but all the cheap seats for cash sale have been sold. This may mean the one-way cash fare is nearer £125; so if you use Miles you are getting £80 of free ticket, which may well make sense.

Another route to look at carefully is New York. The extras on routes to the States are huge: around £245 return. If you can buy a ticket for £360, it is rather foolish to cash in a lot of precious Miles for such a small reward. On the other hand, when the fares are higher, the Miles price becomes more attractive.

Note: Remember that Air Miles offers ‘inclusive fares’ on its main routes; so you do not pay anything extra. This can make them very attractive.

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Airport lounges

Priority Pass, the company that sells airline lounge membership packages, has a new competitor. Airport Angel offers an almost identical service. You purchase membership and then either pay £15 per visit or pay a higher membership fee and have a number of visits included, or purchase unlimited visits. Airport Angel has a slightly smaller network of lounges than Priority Pass but is fractionally cheaper, with annual fees starting at £65 as opposed to £69. Anyone considering either of these programmes would need to look carefully at the range of lounges offered. While both companies offer lounges at most major airports, it is quite likely that they will not have lounges in all the terminals. This is especially the case at terminals that are operated exclusively by one airline. Airport Angel is offering a three-month free trial at the moment (you just pay the £15 fee for each lounge, which is rather less than you would pay if booking a lounge individually through another service).

www.airportangel.co.uk

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New pre-paid currency card

Reward credit cards are becoming rarer, and the conditions tighter while the charges for foreign use on most credit cards make them an increasingly unattractive way of spending money overseas. Pre-paid currency cards can be a cost-effective alternative.

You need to be very cautious when looking at these because most of the cards in the market are offered to those with a poor credit history who could not get a normal credit card. The only one we have really recommended in the past is the Caxton FX card. This is offered by a large foreign-exchange company that gives much better rates for converting sterling to euros or dollars than you can obtain elsewhere. You simply apply for a card, load it up more or less instantly via the Internet by converting pounds into dollars or euros and then you use it just as you would any other Mastercard. You can withdraw cash from ATMs (for a small charge) and use it to pay bills in the currency of the card. The only downside of these cards is that they may not be suitable for leaving as a deposit at a hotel or car-hire company, unless you have loaded much more on to the card than you intend to spend since the hotel will raise a precautionary charge of much more than the likely cost of your stay. For all other requirements, they are perfect – and you can use them to pay hotel bills at the end of the stay simply by using a standard card to act as a deposit and then switching to the Caxton card when you make actual payment.

Now, Caxton has a new competitor, FairFX. This company claims to have unbeatable rates and is, currently, slightly better than Caxton. On the day we checked, rates were:

Euros: FairFX: €1.25, Caxton FX: €1.24, Post Office, banks, high street etc.: €1.208 and below.

Dollars: FairFX: $1.955, Caxton FX: $1.95, Post Office, banks, high street etc.: $1.908 and below.

You have to pay a fee of £9.95 to have a FairFX card issued, but it is free if you deposit at least £500. After that, you can load amounts from about £20 upwards, without commission or any other charges. There is a fee of €1.50 for ATM usage, but other charges, in the card currency, are free.

If you apply through Matalan’s website, the joining fee is waived; so that is the obvious route to take.

We have been impressed by Caxton in the past and we know many readers have this company’s cards. Our only slight doubt about FairFX is that it is a smaller company (Caxton is a well-established currency trader and the card business is simply an offshoot) and we just wonder whether it will increase its rates to the same level as Caxton’s after the initial publicity burst. Of course, Caxton could always retaliate by reducing its rates. In other words, if you have a Caxton card, we would not necessarily give it up immediately. However, if you are going to the US or Europe, you really should have a pre-paid currency card; so we suggest you get one or both. The savings are now too great to ignore.

www.fairfx.com – but apply through www.matalan.com (click on ‘Member offers’)
www.caxtonfx.com

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