According to the Financial Regulator’s annual report, that was published last week, the Irish credit card market is one of the most concentrated markets in Europe.
95 per cent of the Irish credit card market is controlled by only five firms, which obviously creates implications for the market. It means that customers are given less choice over what products they have, and it means that large charges are often impossible to avoid. The majority of credit cards are issued solely by the Bank of Ireland, MBNA and AIB. Worryingly, MBNA and American Express (issued by Bank of Ireland) have some of the highest penalty charges from across the board of credit card providers.
MBNA Gold credit card users are charged €15.24 for any late credit card bill payments.
On top of this, if you don’t have enough money in your account to cover a transaction, you’re charged €19.05. This “unpaid item fee” is around a whopping six times bigger than what is charged by other credit card providers.
The ‘Blue Card’ by American Express (from Bank of Ireland) charges €12.70 for a late payment fee, and €10.16 for going over your credit limit. The Ice card that is issued by Permanent TSB does not charge any late payment or over-credit limit fees. Ulster Bank has an unpaid item fee of just €3 on its standard card.
The stamp duty on credit cards that was implemented by the government has put off new credit card companies from going into the Irish market. It means that Irish people do not have much choice, and they are more likely to have only one credit card to not have to pay the charge more than once.
Last December, the stamp duty placed on credit cards was reduced from €40 to €30 by Finance Minister Brian Cowen. It is hoped that the annual stamp duty is abolished altogether, so that the Irish market is given a much needed lift.