Monzo users who still have prepaid cards will soon be given 60 days’ notice that their cards will stop working if they don’t upgrade to a current account.
Moneywise reported in October 2017 that Monzo was ending sign-ups for its prepaid card after launching a fully-fledged current account.
However, the bank has now set a deadline of April by which time all remaining prepaid card accounts that haven’t upgraded to a current account will be closed.
“Over 200,000” of Monzo’s previous 450,000 prepaid card accounts in use have already upgraded.
Monzo made the decision to close its prepaid cards due to the unreliability of its third-party payment provider. It initially only started offering prepaid cards because it hadn’t received a full banking licence from the Financial Conduct Authority (FCA) to offer current accounts. It received the full licence in April 2017, and says that current accounts will be cheaper for the business to operate.
I’ve got a Monzo card – how do I upgrade to its current account?
Monzo customers can upgrade to its current account at any time between now and April by clicking an upgrade button in their app. They will receive a new card by post in “just a day or two”. In the meantime, users can continue using their prepaid card as normal.
Once you upgrade, you’ll given access to a fully-fledged current account rather than just a prepaid card. This includes features such as a sort code, account number and Financial Services Compensation Scheme (FSCS) deposit protection typical to all ‘traditional’ bank accounts.
The Monzo current account also has the added feature of savings ‘pots’ where users can ring-fence portions of money they want to keep separate from their main balance. These ‘pots’ don’t, however, come with any kind of interest. See our current account best buys for interest paying current accounts and our top savings guide.
Upgrading to a current account shouldn’t affect your credit rating unless you apply for several new current accounts in a short space of time.
Monzo doesn’t currently off the Current Account Switching Service (CASS).
I’ve got a prepaid Monzo card – what happens if I don’t want to upgrade?
Users who choose not to upgrade will lose use of their prepaid cards in April. Monzo explicitly says: “If you want to keep using Monzo you’ll have to upgrade your account.”
Monzo has confirmed to Moneywise that customers will still be able to access their account in the app and see information such as spending and transaction data. You just won’t be able to make or receive payments from your account.
Any money left in the account after deactivation of the card will be returned to the source from which is was initially sent.