Your flexible friend – or a PLASTIC EXPLOSIVE?
You might love that credit card now but will you feel the same in 2024?
Christmas is when ‘plastic money’ really comes into its own as we stretch our credit to the limit. And it’s more important than ever to be on the best deal. So which card is best for you? That depends on what you want it for. If you pay off your credit card bill on time every month, it doesn’t make much difference… you pay 0% interest. But if you have a large overhanging bill – or may have after Christmas – then the credit rate is vital.
Why pay through the nose at 22% or more when you could be paying 0% – at least for a while – if you switch? And what about spending money abroad if you’re off skiing or on a Christmas markets holiday? Some banks offer cracking rates – while others will skin you on currency conversion costs.
And are there other offers or pitfalls to watch out for?
CHEAPEST RATE – AIB CLICK 13.8%
The cheapest standard interest rate is 13.8% on AIB’s Click card. But there are no bells and whistles in terms of special deals for balance transfers.
BEST BALANCE TRANSFER DEAL – AIB PLATINUM/REVOLUT
If you can clear your bill within a short period of time, then special ‘balance transfer deals’ may be for you.
AIB’s 3.83% deal over 12 months for its Platinum card (17% normally) gets the nod here as the best deal because it’s over a longer term than most balance transfer deals and the interest rate it reverts to is still among the cheapest.
However it’s a close call and what’s best for you depends on how quickly you can pay off the overhanging balance.
If your balance won’t be too big and you can clear it in three months, Revolut has a 0% transfer deal combined with a relatively low regular rate (17.99%).
There are other 0% transfer deals over longer periods that revert to higher interest rates. Bank of Ireland and PTSB have 0% deals over six and seven months but when you take other factors into account (see below) these deals aren’t so tasty.
BEST DEAL FOR NEW PURCHASES – AN POST CLASSIC, AIB PLATINUM
Several cards have 0% deals for new purchases, which will work well for you if you pay off everything early in the new year.
However, some people who intend to do this might not be able to afford to once energy bills and other costs kick in. That’s why the 12-month low interest deals from AIB and An Post get the nod here – though it’s a close call.
Most banks give 0% deals on purchases AND balance transfers.
However, with Bank of Ireland’s Platinum card it’s ‘either or’, which is a sting in the small print that most customers probably won’t notice before it’s too late.
BEST FOR USING YOUR CARD ABROAD – REVOLUT
If you’re off on a Christmas break outside the eurozone, you really need to take currency transfer costs into account.
Bank charges for buying abroad or taking money out of an ATM vary widely and some can be quite cheeky. This is where Revolut comes into its own, charging 0% on weekdays but 1% on weekends. (No idea why weekends make a difference.
But it’s worth taking note of this and avoiding it when you’re on holidays or travelling for work.)
BEST FOR CASHBACK – REVOLUT
Cashback is a bit of a gimmick. It’s nice to think you’re getting ‘free money’ every time you spend but in reality it is a very small amount.
With Revolut, you get 1% back on spending up to €3,000 and a miniscule 0.1% after that. That means you get 30 quid for every three grand racked up on your credit card – and then just €3 for every €3,000 spent thereafter. AIB’s deal is a bit lower at 0.5% up to €5,000.
Neither really add up to a ‘hill of beans’ and the psychological incentive to spend more on a credit card can be dangerous.
OTHER SPECIAL OFFERS
An Post has a nice instalment plan interest rate of 8.3% when you buy items costing more than €250. That would come in handy if you want to buy, say, a TV for Christmas. However, some of the 0% interest rates on new purchases trump that offer.
SUMMARY
For years AIB had the lowest credit card interest rates. It still does – and fair play. But it’s good to see Revolut and An Post challenging on both the standard rates and special offers. Revolut’s low-cost currency transfer in particular could prove a winner if you travel a lot.
We included the full list of credit cards from the Competition and Consumer Protection Commission’s regular survey (see left) so you can see what your provider is charging you.
It’s interesting to see Bank of Ireland and PTSB lagging behind in the credit card market– as they do in the variable rate mortgage market – with slightly higher rates.
BoI’s fee of €76.18 on its Platinum card rubs salt in the wound when you consider that AIB’s version has none, while also offering a cashback deal (for what it’s worth) and a far longer-lasting balance transfer deal.