If you are struggling with debt you can also contact the Money Advice and Budgeting Service. You can get more information on managing credit card debt from the CCPC. Consider converting the debt to a personal loan with a credit union or bank, which will have a lower rate of interest and a clear repayment schedule. If you have an accumulated balance and do not see yourself being able to clear it in the short term, you need to address the situation. If you want to learn more about how credit cards are best managed, Mr Bailey recommends “An excellent resource for consumers to understand how credit cards work is the Competition and Consumer Protection Commission website, which provides simple explanations on financial products,” he said.Īt the credit union, we provide an open environment where financial advice, guidance and support is available to anybody with these types of queries. Most credit card providers start charging interest on cash withdrawals from the time the money is taken out, so there is no interest-free period, as there is with purchases.Ĭash withdrawals are also frequently charged a higher rate of interest and should be avoided except in a genuine emergency. You can set up a direct debit each month for a certain percentage of the bill, or a certain amount every month so that you are not tempted to only pay the minimum balance.Īn important thing to mention is that taking out cash from your credit card is an incredibly expensive way to manage your spending. Ideally you should pay off all each month as it falls due, thus avoiding interest payments. It will cost you a lot in interest and it could end up taking years to pay off a large balance. So making only the minimum payment on a regular basis means you are setting yourself up for increasing debt. This will show how much you spent since the last statement, any cash you withdrew using your card, any interest due, the total balance (amount you owe) and the minimum payment that must be made by a set date, called the due date.Ĭlearing only the minimum payment means you will start to pay interest on the rest of the balance from the due date - the interest you pay will also be on the statement. Each month, your credit card provider will send you a statement, either electronically or by post. To get the best use from your credit card, and stay in control of the debt, you need to know both the interest you pay and how the card operates. With a significant number of people in the country still using credit cards to fund ad hoc items, it is concerning that lack of knowledge on interest rates remains very much widespread. “Since our survey last year, there has been a notable lack of improvement in consumer awareness around credit card interest and how that interest is applied,” ILCU Head of Communications, Paul Bailey said. In reality, credit card interest in the Irish market typically ranges from 13% to 23%. 36% of credit card holders incorrectly thought they “don’t pay any interest” if they cover the minimum balance due at the end of each month and of those that claimed to know what interest they pay, over half believed they pay less than 10%.
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