Bank of Scotland credit card move could save Irish customers €80m

CREDIT CARD holders could cash in on a price war after Bank of Scotland announced yesterday it was entering the market.

The bank triggered a revolution when it entered the Irish mortgage market in 1999, offering borrowing rates 1.5% below most lenders and forcing them to cut rates. Analysts believe borrowers have saved up to €500m a year as a result.

Bank of Scotland (Ireland) executive director Harry Slowey said yesterday the bank would offer credit cards here within three to six months.

Bank of Scotland cardholders in Britain benefit from interest rates as low as 9.9%, at least 5% lower than standard credit cards on offer here, according to figures released by the Irish Financial Services Regulatory Authority (IFSRA).

Mr Slowey declined to give precise details of the credit card offer for competitive reasons, but said it would reflect “our commitment to leave more in the pocket of the Irish consumer”.

Irish cardholders owe €1.6 billion on their cards, says IFSRA. If other banks cut rates by 5% to match a Bank of Scotland offer, borrowers could save €80m in interest payments annually.

But the Irish Bankers’ Federation (IBF) has warned the €40 government tax on credit cards was a “serious obstacle” to allowing consumers to switch credit cards and acted as a barrier to competition.