Excellent article on Credit Cards

Sleipnir

From today's Independant.

From what I can tell, if you want to pay off your credit card the best thing to do would be to transfer to a "0% interest on credit transfers for 1st 6 months" card, and after that period to a lower APR rate?




SHOPPING around can slash credit card interest charges by as much as 10pc, saving customers hundreds of euro, according to the latest survey by the Irish Financial Services Regulatory Authority.

The survey shows that interest charges on purchases vary by up to 8pc and up to 10pc on cash advances depending on the type of card you hold.

The cheapest APR on both purchases and cash comes from One Direct which charges 10.9pc for holders of their Gold Visa card.

This compares with 18.9pc interest on purchases and 20.68pc on cash withdrawals for holders of the AIB Classic Master or Visa card.

Irish credit card holders can take heart, however, from the fact that their British counterparts, according to the Bank of England, owe a total £53.5bn, which is roughly equal to the total annual economic output of this country.

The Irish study also shows that the more money you have, the cheaper it is to borrow. Holders of "Gold" credit cards have a distinct advantage with lower interest rates.

To qualify for a Gold card applicants must earn in excess of €25,000 a year and the Ulster Bank "Zinc" card has a minimum qualifying salary of €30,000 a year.

There are enticing introductory offers for most cards varying from 0pc interest on purchases for the first six months with Bank of Ireland, Tesco Personal Finance and Ulster Bank Zinc cards to 9.9pc for 12 months with AIB Classic and Gold cards.

Late payment fees too vary, from zero to a penal €15.24 charged by One Direct and MBNA who also have the highest fee of €12.70 for those exceeding their credit limit.

Fine Gael finance spokesman Richard Bruton has commended the IFSRA for bringing transparency to consumers but attacked the financial institutions for "creating barriers" which obstruct the ability of consumers to move their business.

He said: "Under the current arrangements consumers can encounter serious difficulties when transferring direct debits, standing orders and other services.

"The Government must move to introduce new mechanisms to make it easier for consumers to shop around between credit cards and bank accounts."

Mr Bruton has also accused Finance Minister Charlie McCreevy of "lying in the long grass waiting to pounce" with his €40 annual stamp duty fee on credit cards.

The survey showed the maximum interest free period on credit card purchases varied from 58 days at MBNA and One Direct to 25 days from the date of statement at Permanent TSB.

The maximum interest-free period for cash advances also varied from no days at MBNA, National Irish, One Direct, Permanent TSB, Tesco Personal Finance and Ulster Bank to 56 days at AIB, American Express, Bank of Ireland, Barclays and EBS.

Cash advances also incurred a minimum fee of €1.90 or 1.5pc of the transaction to €2.54 or 2pc of the transaction depending on the card.

Sarsfield

One charge the article doesn't mention (but the Irish Times article does refer to it) is the charge for non-euro transactions. Very important to Internet shoppers who transact a lot in dollars or sterling.

MBNA & One Direct charge 2.65% of the transaction whereas most others only charge 1.75%.

Tazz T

When I lived in the UK I regularly changed my credit card to another one with a 0% rate for fixed for 6 months. Saved a fortune in interest yet the goverment here has stuffed competitiveness with that idiotic tax. You move cards you end up paying the tax on both.

slave1

One charge the article doesn't mention (but the Irish Times article does refer to it) is the charge for non-euro transactions. Very important to Internet shoppers who transact a lot in dollars or sterling.

Tesco visa dont charge anything

Sarsfield

Originally posted by slave1
Tesco visa dont charge anything

Now, that's something I didn't know. But hardly worth changing cards due to the additional tax of cancelling my existing card. Thank you Mr McCreevy :rolleyes: