Fast-expanding airline Ryanair this week launched its latest venture - a credit card that allows people to earn free flights.
With its boast that this is a card "that lets you fly for free," the no-frills airline is likely to find plenty of takers for its plastic - but there are some pretty hefty strings attached to this offer.
Ryanair is not the first airline to enter the already-crowded credit card market: British Airways offers its Executive Club frequent flyer scheme members an American Express card, while easyJet's sister company www.easyMoney.com launched a card 18 months ago.
Its move came in the week that the Office of Fair Trading slammed card payments giant MasterCard for overcharging retailers and creating a situation where millions of consumers are paying over the odds in shops.
The Ryanair card's main interest rate is a far-from-special 15.9% APR for purchases (there is an introductory 1.9% balance transfers rate), so if you're one of those who does pay interest, there are plenty of better deals around.
However, for many people the interest rate is arguably irrelevant: 50% of cardholders pay off their bill in full each month. For them, a decent rewards programme is likely to be much more important.
With the Ryanair card, the first time you use the card, you get a free return flight on any of the company's 101 European routes. You get a further free flight when 10 Ryanair return flights are booked and paid for within one year on the card.
But - and it's a big "but" - the offer's small print states that a total of only 20,000 free flights have been set aside for these offers. That rather begs some questions: what happens if the company is deluged by, say, 100,000 applications? When the 20,000 free flights run out, what happens then?
Spokesman Paul Fitzsimmons says the 20,000 figure is reviewable and indicated it is "likely" it would be in creased if the card proved massively popular.
Doubtless the company didn't want to give an open-ended commitment for fear of ending up with a Hoover-style free flights fiasco on its hands. When Hoover did an ad campaign a decade ago offering two free air tickets for every vacuum cleaner sold, hundreds of thousands of people took advantage of its generosity, and the debacle ended up costing the company tens of millions of pounds.
The "buy 10, get one free" offer is clearly only really going to benefit frequent flyers such as regular business travellers and holiday property owners travelling perhaps once a month. However, Ryanair points out that the 10 you must buy don't have to be for you - so if you booked Ryanair flights for friends on your card, this would still count.
With the free flights, you must pay the taxes and charges - typically around £25 for a return flight to France. And they are subject to availability, so if a flight is full, you won't get on it. Other perks include the ability to manage your account online.
Stuart Glendinning at comparison website moneysupermarket.com says the Ryanair card "doesn't compare favourably with many other credit cards on the market, in that the standard APR of 15.9% is high compared with Cahoot, Co-op and h2x, the internet card offered by Halifax, which all offer rates below 10% APR".
He believes the free flights offer is only going to be beneficial to a small percentage of Ryanair's customers. "I would recommend that consumers shop around for one of the more competitive deals on the market," he says.
Ryanair's plastic will be jostling for airspace with cards such as the British Airways American Express credit card, which is only available to members of BA's Executive Club. This has quite a high interest rate (19.9% APR) but a fairly decent rewards scheme.
You get one BA Mile for every £1 spent on the card, and when the card is used to pay for BA flights you get extra BA Miles. There is no annual fee in the first year but to escape the £20 fee after that, you must spend at least £4,000 a year on the card.
Meanwhile, there is the easyMoney credit card. This is a bit different in that it lets you choose its key features - the interest rate, annual fee and so on. However, your credit rating will also be taken into account when the interest rate is set.
The lowest interest rate is 9.9% APR but to get that you must pay an annual fee of up to £20. Surprisingly, the card isn't linked up to easyJet - you can't earn points towards flights or get free trips - but it does offer up to 0.8% cashback on purchases.
Be aware that there are many providers out there offering lower interest rates than all of these. For example, Abbey National, Capital One, Marbles, Morgan Stanley, Nationwide, Royal Bank of Scotland and Virgin Money are among the providers offering introductory 0% rates on purchases for the first six months.
