AIB cuts could spark card war

AIB has launched a new credit card with an APR of 8.5% in a move that could spark a credit card war in the lucrative Irish market.

The bank is already the leading player, slightly ahead of arch-rival Bank of Ireland.

The new card is called Click, and has to be applied for online. It will be managed through AIB’s internet banking service.

Last year credit cards facilitated the purchase of €10 billion worth of goods and services while 40% of the 2.1 million plus cardholders used their card as an expensive means of borrowing.

It is reckoned the banks made about €150 million profit from cards, which in most instances charge high rates on unpaid bills.

This new offering is a first for the Irish market and easy to use, said the bank.

It can be managed online and it is also the first portrait-style card, reflecting the change to chip & pin technology.

As consumers get more fearful about their jobs as the economy slows, AIB has moved to ensure that it retains its competitive edge in a market that is becoming increasingly more competitive.

Michael McCarthy, head of card issuing at AIB, made it clear in a statement the bank has gone on the offensive in a market where the rate of credit card growth is slowing as consumers become increasingly fearful about the future of the economy.

“We are sending customers a very clear signal: if you want a great credit card rate, look no further than AIB.

The package “is not a short-term quick fix rate”, he said.

Other rates can be as high as 14.9% for Bank of Ireland’s Platinum card, while Halifax charges a more competitive APR of 9.5%, still 1% above the latest offering from the country’s biggest bank.