Liz McManus (Wicklow, Labour)
Link to this: Individually | In context

Question 47: To ask the Minister for Finance his views on the annual credit card survey published by the Irish Financial Regulatory Authority; if his attention has been drawn to concerns expressed that Irish credit card rates are considerably in excess of those charged in other countries; and if he will make a statement on the matter. [18277/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I welcome the publication by IFSRA, the financial regulator, of the credit card cost survey. The financial regulator publishes cost surveys twice a year on credit card charges. The cost surveys are designed to help consumers compare product costs between the main providers. The surveys set out the interest, fees and introductory offers available on credit cards. The information provided is intended to encourage and assist consumers to shop around. The publication of these surveys, together with the measures contained in section 128 of the Finance Act 2005 to eliminate the double stamp duty charge on the switching of credit card accounts will facilitate consumers who wish to change their credit cards to one that is more suitable to their needs.

I am aware that concerns have been expressed about the levels of interest charged on credit card debt. However, any comparisons with the rates chargeable in other countries would also need to take into account the average period allowed for settlement of accounts and the extent to which consumers avail of this option to clear their accounts before interest becomes chargeable. In this regard, I refer the Deputy to the article entitled, Credit Card Debt in Ireland: Recent Trends, in the first quarterly bulletin for 2005 published by the Central Bank and Financial Services Authority of Ireland the conclusions of which include the following:

The level of interest rates charged on uncleared credit card balances has frequently been the subject of critical comment. When account is taken of payments made by credit card providers which earn no interest, the average return on credit card lending is close to 12 per cent. This is not out of line with interest rates on unsecured credit in similar risk categories and, indeed, is below the average interest rate on personal overdrafts.