Pay credit card bills on time - IFSRA

The Irish Financial Services Regulatory Authority (IFSRA) today published its first independent cost survey on credit cards.

The survey shows the interest charged by the main card providers in the Irish market and provides information on how to manage your credit card successfully.

According to Mary O'Dea, IFSRA Consumer Director: "Credit cards are a great way of paying for goods and services if you pay your bill in full and on time in each billing period.

"Many cards give an interest-free period of 56 days, which means you can use your credit card and still not pay back the outstanding amount for several weeks without having any interest charged.

"It is when you regularly fail to pay your bill in full that credit cards become a costly item to have in your wallet."

The regulator advised that If you usually pay off your balance in full by the due date, you should opt for a card that offers low fees and charges and one with a long interest-free period.

The IFSRA points out that the APR is not as important here as you will usually avoid interest.

If you usually carry over most of your balance each month you should shop around for a card with a low APR and always compare late payment charges and avoid these where possible.

The IFSRA urges people who have run up a large credit card bill to cancel their card or stop using their card and to pay off the outstanding balance before making any new transactions.

It says that people could take out a personal loan from a bank or credit union, in order to pay off the debt.

Switching to a credit card that offers a low rate on balance transfers is offered as a solution but the IFSRA warns consumers to remember this introductory rate is for a limited time, and when this time lapses the higher APR will apply, so you should attempt to clear your debt before this period runs out.

"Consumers should carefully work out how much their repayments will be over the introductory period if they move their existing balances to a new card," O'Dea added.