Banks are always advertising great offers to new customers when it comes to credit cards, but many of them can have unpleasant catches. Here’s what you need to know to make the smart decision about your next credit card.
What is a credit card?
In layman’s terms, the money you spend using your credit card is a loan from your credit card provider. When you sign up, your bank or provider will set a maximum limit you can spend on your card – a limit that cannot be increased without your permission. A customer can avail of up to 56 days credit interest-free if the bill is paid off in full each and every month.
Paying off your balance
Each month, you’ll need to make the minimum payment by the established due date to avoid being charged late payment fees. This amount is usually around 2% to 5% of the total amount you owe and will be laid out on your statement, along with the total amount due.
Incentives
Banks will always offer impressive deals to lure new customers in and while these can be incredibly beneficial, it’s important to look for the long-term benefits. One great example of this can be found with KBC’s Credit Card; they’ve partnered with MasterCard, which means great rewards for customers on PricelessIreland.ie. Here you can find exclusive experiences and offers, from priority bookings to special discounts, both at home and abroad.
KBC also have an introductory offer of 4% cash reward on grocery and online spend, which could earn you up to €120 in the first three months of having your card. But it’s not just an offer to lure you in – you can continue to earn cash reward on your grocery and online spend at a rate of 1% (up to €10 a month) after the introductory offer. That means you could earn up to €210 in the first year!”
Interest and how it is charged
If you pay your bill in full before the due date you will not be charged any interest. However, keep in mind that most credit card providers don't offer an interest-free period for cash withdrawals. The amount of interest you are charged depends on the APR on your card.
The extra fees and charges
There are some important charges you should take note of when signing up for a credit card.
- Over Credit-Limit fee: Charged each time you go over your agreed credit limit.
- Cash Advance fee: Charged each time you make a cash withdrawal.
- Foreign Exchange fee: Charged for every purchase and cash withdrawal in a currency other than Euro.
- Late Payment fee: Charged if you do not pay the minimum repayment by the due date.
- Government Stamp Duty: An annual tax, usually deducted from your credit card account on April 1st.
Switching your credit card
Credit card providers often offer new customers extra incentives to sign up, however we’re especially impressed by everything KBC currently have to offer.
- Additional 3% bonus cash reward on grocery and online purchases for the first 3 months on top of their standard 1% cash reward. That’s 4% for 3 months – perfect for budgeting mums!
- 0% interest balance transfers for the first 6 months when you transfer your existing credit card balance to KBC
- Up to 56 days of interest-free credit
- 4 additional cards on your account for free
KBC require that customers close their old credit card account and provide a closure letter to them within 90 days, which means you'll avoid paying two stamp duty charges on two separate accounts.
For more information about the KBC Credit Card, visit KBC.ie. To read more about terms and conditions, click here.
