By Ruth Lythe for the Daily Mail. Families who take pre-paid currency cards on holiday risk having their spending money frozen because hotels, car hire firms and even restaurants are allowed to hang onto their money. You use them in exactly the same way as a credit or debit card. The money, which in the case of car hire can be thousands, never actually leaves the card, but the holidaymaker cannot spend it for anything up to a month.
But Money Mail can reveal that as well as taking payment for the services they provide, many restaurants, bars and car hire firms secretly ring-fence an extra chunk of cash on these cards. This is typically to protect them if there are unexpected additional bills, such as a large tip, damage to a hire car or use of a hotel mini-bar.
She believed she would have only a small additional sum on top to pay for the car when they arrived. A few days later, the card was declined at a cash machine. They only had a credit card, which charged expensive fees, to fall back on. Sharon, an aromatherapist, says: Hotels, car hire firms and even restaurants are allowed to hang onto their money and can freeze money on cards.
The Fields say the Thomas Cook salesman did not warn them they should not use the card at a car rental firm. Thomas Cook says the couple were given a booklet explaining these cards are not intended for car hire or booking hotels. While the explanation is not hidden away, it is not mentioned until page four. Most people never notice this as they rarely use their whole credit card limit — or use an alternative for holiday spending.
The problem with pre-paid cards is that the only funds available are those that travellers have specifically put on it for their holiday spending. Our investigation has revealed this ring-fencing is not limited to car hire firms and hotels — restaurants, bars and petrol stations can also do it. Holidaymakers can have a fifth added to their restaurant bills for tips. The balance will eventually be released — but it can take a month.
In the meantime, travellers have no access to the money — which will hit those on limited budgets. James Daley, founder of consumer website Fairer Finance, says: They may have set a budget and not be able to top them up whenever they need to. The card firms say that they warn of the practice and it is up to customers to check their balances while they are abroad.
A Thomas Cook spokesman says: A Hertz spokesman says: A spokesman from trade body the Prepaid International Forum says: Always check terms and conditions of use. The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. How RBS turned blind eye to ruthless loan unit: Health policies have changed in recent years - should you switch your critical illness insurance?
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Fund manager firm Fidelity will cut your fees if it performs badly Previous. Why your holiday cash card could be frozen: Car hire firms, restaurants and hotels can secretly ringfence extra cash on prepaid currency cards The money never leaves the card, but holidaymakers may not be able to spend it for up to a month Many car hire firms will not take prepaid currency cards for this reason The Field family found their Thomas Cook currency card was rendered useless when they used it to pay for their hired car By Ruth Lythe for the Daily Mail Published: Ten tips to make sure you steer clear of holiday car hire cons Five tips to save money over the holidays and still have a great time Heading on holiday and fancy having more to spend?
Pick up one of the best debit and credit cards to help you avoid overseas fees Heading abroad? Learn more about how to safely use a currency exchange card and get up to two for FREE. Holiday Money Deals of the Week. Free currency exchange card.
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