A recent review by the Central Bank of Ireland has revealed that more than 400,000 credit card accounts in the country are subject to Annual Percentage Rates (APRs) exceeding 23%. This comes as part of an examination of the approximately 1.3 million credit card accounts in Ireland.
Under new legislation introduced in 2022, credit card accounts issued since then cannot carry an APR higher than 23%. However, the review highlights that a significant number of customers remain on higher rates that were set prior to this legislation.
The APR represents the total cost of borrowing for one year, including both interest and any associated fees. The Central Bank noted that many customers may not realize that they could potentially lower their costs by switching to another credit card provider or selecting a different product with a more competitive rate.
In addition to high interest rates, the review also found several other concerning issues. These include inadequate handling of customer complaints, concerns over how credit cards are marketed to consumers, and insufficient support for customers facing financial difficulties.
The Central Bank has indicated that it is following up directly with credit card providers to address these problems. As part of its response, the bank has urged firms to inform customers who are on high APRs about their options for potentially switching to more affordable credit products.
Colm Kincaid, Director of Consumer Protection at the Central Bank, emphasized that the review was conducted in light of the ongoing cost of living challenges many consumers face. “We found that many customers are still on historic high rates, and we have instructed lenders to take action by making these customers aware of the available options to help them switch if they choose,” Kincaid said.
He also advised consumers to take proactive steps in seeking better deals. “If you’re a credit card customer, there’s no need to wait for your provider to contact you. Check your credit card statement now to see if a lower rate is available either from your current provider or a different one,” Kincaid suggested.
With the holiday season approaching, a time when credit card usage tends to peak, Kincaid reminded consumers to avoid paying more than necessary on their credit card balances. “This is a critical time for consumers to consider their payment options and potentially save money,” he added.
