This week, the bank and payments company Revolut announced its intention to start rolling out credit cards to its customers in Ireland.
It comes amid something of a shakeup in the market as some customers seek out alternative credit card providers as KBC and Ulster Bank continue their march towards the exit.
Revolut says it won't charge interest for the first three months on its cards as long as users make monthly payments.
After that, the APR (annual percentage rate) of interest charged is 17.99%.
We have used the opportunity of this launch to take a look at the credit card market in Ireland, how Revolut's offering compares to competitor cards on the market and if there's a good understanding here generally of how credit cards work.
High rates of interest
The answer to the latter appears to be quite a resounding 'no' for much of the population.
About half of us has a credit card, according to a survey by the Irish League of Credit Unions.
However, two thirds admit that they don't have any idea of what interest rate they are charged on their cards.
For the 65% of cardholders who clear their balances every month, that's not an issue really.
But for the one in five who make the minimum payment each month - and especially the one in ten who say they are frequently unable to meet the monthly charge - that could be quite a problem.
The interest can be quite hefty, causing big bills to become enormous in a short space of time.
"It's revolving credit," Frank Conway, founder of the financial education website, Moneywhizz, explains.
"That's the other side of compound interest. Compounding works very well with pensions, but it works terribly with debt," he said.
More than a third of those surveyed by the ILCU said they believed they didn't incur any charges if they met the minimum monthly repayment, which is not the case.
Interest is applied to the full remaining balance with the rates being charged here ranging from 14% to over 25%.
"The fact that more than half of those surveyed don't have a true understanding of how credit cards work is a concern, particularly given the number of people who use their credit cards for monthly ad-hoc purchases," Paul Bailey, Head of Communications with the ILCU said.
"Credit card companies have a duty to make sure that their customers understand the product they are offering," he pointed out.
However, it appears that there is a considerable knowledge gap there.
The credit card market
With the arrival of Revolt, there are now effectively six main providers of credit cards in the Irish market - the three main banks, Avant Money and An Post.
As with all financial products, there are a vast array of pros and cons with each offering, and pretty substantial variations in interest and charges.
All providers must levy Government Stamp Duty on credit cards, currently amounting to €30 per year per credit card account.
Most don't charge an annual fee but the ones that do have a charge attached tend to offer cashbacks or rewards.
For example, Bank of Ireland's Aer credit card - which has a €7.99 monthly charge - offers a host of travel perks including free travel insurance and two free return fares to Europe when the holder spends €5,000 or more on the card in a year.
That's attractive to a certain class of consumer, but they would want to be clearing their cards every month as there is an interest rate of 16% attached.
AIB offers 0.5% cashback on its Platinum card on a spend of between €5,000 and €50,000 in a 12-month period. The maximum return is €225. However, there is no charge attached to this card making it an attractive option for big spenders who - again - clear their debts at the end of the month.
The annual percentage rate attached to this card is 17%.
So, the card with the lowest interest rate is not necessarily the best?
For those who tend to build up debt on their cards, the interest rate is key.
AIB offers the lowest rate on the market with its Click credit card. It's a no-frills card, devoid of perks or an introductory rate on transfers or purchases, but it has an attractive rate (in the context of credit cards) of 13.8% on balances.
However, for those with substantial balances on their current cards - that may be unmanageable - they should look at switching providers.
Most products on the market offer an introductory rate on balances which is lower than the rate that normally applies.
Some, in fact, offer an interest free period, which is particularly attractive to cardholders with a big balance, offering them the opportunity to reduce or eliminate the debt.
An Post has the most attractive product on this front, offering an introductory rate on balance transfers of 0% for 12 months on its Classic card.
The APR that applies after that period is a relatively steep 22.9%.
"People can run up debt very quickly. Take for example a first time buyer couple. They might just get a credit card debt for convenience. It might have a limit of €3,000, but that can become €6,000 very quickly," Frank Conway explains.
"They might convert that into a term loan facility or get a zero percent (credit card) facility for a period of time," he added.
However, he cautioned that in applying for a new credit card, the applicant will be subject to a credit check.
"They have to make sure you have good credit if it's over the €500 limit, which most credit cards will be anyway. In some cases, you may not get approved if you have a bad rating or have had some defaults," Mr Conway said.
How does Revolut's offer compare?
The online bank is expanding the range of products it offers customers here with credit cards the latest product to be launched.
It follows the announcement last month that it was proceeding to give its customers here Irish bank identification numbers - or Ibans - in a move that will make it easier for consumers to conduct banking activities through its app. (Up to now, Revolut has been using Lithuanian Ibans).
The credit card offering from Revolut includes no interest for the first three months, as long as monthly minimum payments are made.
Zero interest will also apply to balance transfers for the first three months.
After that, the annual percentage rate is 17.99% - which is relatively competitive and somewhere around the average rate being charged in the market here.
Individual affordability limits will be applied to customers based on a credit assessment carried out by the company - a relatively new departure in the market.
What's happening to Ulster Bank and KBC credit cards?
For Ulster Bank credit card holders, cards will cease operating next month, but customers will already have been informed of that six months before the closure date.
They will have to seek a new provider if they wish to continue using a credit card.
KBC credit cards will automatically switch to Bank of Ireland and the same credit limits as before will apply.
Business credit card accounts at the Belgian bank will close, however, and the user will have to seek a new card with another provider.
"Before you can close your Ulster Bank or KBC credit card account, you will need to pay any outstanding balance, fees and stamp duty," the Competition and Consumer Protection Commission advises.
"Check with your new provider to see if you can transfer any outstanding balance from your old card to your new one. A balance transfer is a good way to save money on existing credit card debt," the CCPC adds.
It cautions that switching to a new provider does not guarantee that the holder will be entitled to the same type of card with the same terms as before.
Income and ability to make repayments may affect the type of product that's available and the credit limit that is applied to the card.
Or customers could simply use the opportunity to end their reliance on credit cards.
While they are a useful financial product in certain circumstances, they're by no means mandatory.
