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MONEY MADE EASY - YOUR FIVE MINUTE GUIDE TO CREDIT CARDS

MONEY MADE EASY

YOUR FIVE-MINUTE GUIDE TO…

CREDIT CARDS


MBNA has stopped taking new applications, removing a big player from the market at a time when many people are finding it difficult to get a credit card. We assess the chances of your application being accepted.

 


WHAT’S MBNA UP TO?

It is not taking on new business as part of the handover of its Irish credit card book from Bank of America to Apollo Global Management, a private equity firm. “We have suspended new applications for consumer credit cards,” MBNA said. “This is a natural and logical step while we work on the transition of the Ireland consumer credit card business to the new owner. This decision doesn’t change anything for our existing customers.”


WHO’S OPEN FOR BUSINESS?

Banks are advertising credit cards but Tesco may be your best bet of getting one. Simon Moynihan of Bonkers.ie, a price comparison site, said: “Tesco seems to be open for business but it vets applications heavily. Our feedback is that banks are turning most people down, even good customers.”


WHAT’S ON OFFER?

If your application is successful, Tesco will give you interest-free credit for eight months on purchases made with your new card. It may also suspend interest on balances transferred from other cards for six months. When these introductory offers run out, you will be charged 19.1% interest on unpaid balances. Tesco awards loyalty points for all spending on its card, which can be exchanged for discounts on shopping at its supermarkets.


WHAT ABOUT THE BANKS?

Moynihan said that introductory offers are a good indicator of the banks’ appetite for new customers. Permanent TSB’s Ice Visa card has the best introductory offer of any bank – 0% for six months on balance transfers. Allied Irish Banks charges 3.83% interest on balance transfers and purchases for up to 12 months. Its Platinum card is worth considering if you earn more than €50,000 or €40,000 if you are an existing AIB customer. It gives cashback of 0.5% on purchases after you spend more than €5,000 a year on the card.


WHAT’S THE ALTERNATIVE?

Most banks are replacing Laser cards with Visa debit cards. They are a perfect substitute for Visa credit cards, although you cannot spend more than the balance in your current account. Prepaid cards are another option. They have no credit checks because you cannot spend more than the value loaded on the card in advance. Prepaid cards have heavy charges, though, with many having annual fees and charges each top-up and transaction.

Moynihan tipped the prepaid Mastercard from Moneybookers, an online payments provider. “It’s got a €10 annual fee but no fees for top-ups or using the card,” he said.

Ryanair’s Cash Passport, another prepaid card, allows you to avoid the airline’s administration fee of €6 a passenger per flight. The savings could be quickly lost, however, through a €3 fee for each top-up, a €3 fee if the card is inactive for more than six months, and an annual fee of €10.


TOP TIP

Avoid the payment protection insurance that is sold with credit cards. It is supposed to pay out if you lose your job or fall ill. Banks are being forced to refund customers, though, after it emerged that they sold the insurance to cardholders who could never have claimed successfully because they were self-employed or for other reasons. Payouts may be limited, even for successful claims. Bank of Ireland’s insurance pays 10% of your card balance if you lose your job, with maximum payout of €2,000.


Niall Brady

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