Consumer Champion: Top tips for keeping your credit card under control and dodging the debt trap
Who knew banks had a sentimental streak? Only kidding - they don't.
They wait until your summer holidays are a distant memory, you've got the kids back in school and are just about to switch on the heating again when your credit card bill arrives on the mat.
As you scan it - perhaps realising the duty-free bottle of Ouzo for Granny was a waste and that impulse-purchase sarong will never be worn - you know you'll be paying it all off until next summer.
Well, it's time to get to grips with your credit before it masters you.
Credit card interest remains the highest - apart from moneylenders - of all forms of interest, so it makes sense to pay it off as quickly as possible.
Why they charge so much is a mystery. It can be up to an astonishing 23pc p.a. Add in late payment fees, cash withdrawal fees and all the other charges, and you'd need a bank manager following you about to keep up.
Don't be fooled by the 'minimum payment' on the bill. Typically 2-5pc of the amount owed, it is set up to ensure you don't pay your balance, thus ensuring more profit for the bank.
A debt of €3,000 at 22pc interest paid off with a 'minimum' payment demand of €100pm would take three years and eight months to clear - and that's if you cut up your card. If you can't clear your bill every time, get into the habit of using your debit card more often. Even if it tips into occasional overdraft, it's cheaper.
Here are my top tips to control credit card debt:
◊ Stop using your card. It sounds obvious, but credit can become a habit. Occasional or online purchases are fine, but if you're using it to pay for the weekly groceries then you're really in trouble.
◊ Clear as much as you can as quickly as you can. It's the highest interest-bearing loan you have, so it should take priority.
◊ Consider reducing the limit you have - banks will often offer you more, but you can tell them that you want it capped.
◊ Use a credit card that allows online access; this way, you will see the debt every time you log on, rather than waiting for the paper copy. It concentrates the mind.
◊ Never, ever use a credit card to withdraw cash from an ATM. The rates charged are far higher than for purchases, and there's an additional 'cash advance' fee also.
◊ Cut up your card horizontally. You can still use it online, but not for impulse buys in shops.
◊ Put your credit card in a small plastic container (in a plastic bag) and fill with water. In the time it takes to defrost, you'll decide whether you really need that purchase so badly. Don't cheat - microwaving it will ruin the magnetic strip!
◊ Consider switching to a zero balance card (see table). It will give you breathing space to clear the loan, but don't use it in the meantime if possible.
◊ Use a pre-pay card (3v or Payzone) which will allow you make the same purchases, but only with your own money.
When choosing a credit card provider, ask the following questions:
What is the interest rate for balance transfers? What is it for new purchases and for how long?
Is there a minimum salary requirement? Is there a maximum credit limit for this interest rate?
How many days 'free' credit do I get before the bill arrives?
Renters, know your rights
With students heading back to college, and 29pc of all adults living in private rented accommodation, pressure has never been more intense - or rents higher - in the industry.
Knowing your rights - as a tenant or landlord - is vital. The Private Rented Tenancies Board (PRTB) was set up to handle disputes that arose. However, it has come in for much criticism, justified in most cases, over the time it was taking to deal with complaints.
But I'm pleased to say new structures have meant these waiting times have been reduced considerably, from 18 months on average to around 18 weeks for adjudications which require a decision.
In many cases, mediation over the phone works perfectly well, with the PRTB dealing separately with both parties. The wait time here is just nine weeks on average. It costs €25 to bring a complaint to the board, but €15 if you do it online.
I get readers complaining to me about being turfed out of accommodation, having deposits withheld and dirty, unacceptable living conditions. However hard it is to find a rental, nobody should have to put up with that.
All landlords must register with the PRTB, and they have a good rental index site which shows what rent you should be paying in each area by property type. Landlords cannot charge above 'market rent'.
See www.prtb.ie for more information - and don't be afraid to exercise your rights.
Banks, please take note, twenty is plenty for ATM withdrawals
I am pleasantly surprised to see more ATMs spewing out €20 notes instead of €50s, which you have to hand over apologetically in shops when you're only buying a newspaper or coffee.
The Central Bank issued a diktat to retail banks last year, instructing them to use lower-value notes in ATMs to help consumers.
I'm pleased some of them got the memo.
Others, please take note. Yes, €50s might make it easier for you to stack the machine, but not for us on the other side.