FAQ Friday: What will happen to my credit card when my bank closes?

September 30, 2022

On the last Friday of every month, we answer some of the most frequently asked questions (FAQ) from the hundreds of consumers who contact us. This month, we look at what happens to your credit card if your financial provider is leaving the Irish market.

What will happen to my credit card when my bank closes?

With Ulster Bank and KBC leaving the Irish market, a lot of people may have to find a new credit card provider. If you are an Ulster Bank customer, your credit card account will close and your card will stop working in March 2023. Ulster Bank will send, or have sent, you a letter giving you six months’ notice before your account closes. If you want a new credit card, you will need to apply for one with a new provider.

If you have a KBC credit card, it will move automatically to Bank of Ireland. But, if you have a KBC business credit card, it will close and you will have to apply for a new business credit card with another provider. KBC will write to you, or may have already contacted you, with more information about your credit card, including when it will close and the steps that you need to take next.

Top Tip

If you are applying for a new credit card, check out our credit card Money Tool to help you pick the best provider for your needs.

When applying for a new credit card, your new provider will check your credit history. It’s important to tell your new provider about any previous missed credit card or loan repayments. Missed payments on your credit history could result in your application being delayed or refused. If you have a valid reason for any missed payments, your new provider may consider it in your application.

What if I have an outstanding balance on my credit card?

Before you can close your Ulster Bank or KBC credit card account, you will need to pay any outstanding balance, fees and stamp duty. 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. Some providers offer 0% interest on balance transfers for a set period of time.

If you think you will struggle to clear your credit card debt before your account is due to close, talk to your current provider about your options.

Top Tip

You may be able to consolidate your credit card debt into a personal loan at a lower interest rate. This could be a cheaper way to clear your debt and let you close your credit card account. Try our loan Money Tool to find the best available rates.

I already paid my credit card stamp duty this year; do I need to pay it again?

There is an annual stamp duty of €30 on all credit card accounts. Stamp duty is taken from your account by your credit card provider on 1 April every year, for the previous year. So, the stamp duty taken from your credit card account in April 2022 was for the year 2021.

If you closed your account with Ulster Bank or KBC recently, you would have been charged €30 stamp duty again for 2022. You should have received a letter of closure from your bank to confirm you have made this payment for 2022.

Your bank was correct to charge you both times, but if you open anther credit card account with a new provider you will not be charged again for 2022. It is important that you give your new provider this letter of closure to ensure you are not charged twice for 2022.

Top Tip

Before closing your old credit card account, remember to move any recurring payments or subscriptions to your new credit card. For example, your Netflix subscription or toll payments account.

Will my new credit card be the same as my old credit card?

When you move to a new provider, you may not be entitled to the same type of credit card that you had before. Your new provider may ask for your recent bank statements to check your income and ability to make repayments. This may affect the type of credit card you are able to get. For example, if your income is less than it was when you got your old credit card, your credit limit may be lower on your new card.

In some cases, you may be able to keep the same type of credit card. For example, if you have a KBC consumer credit card, it will move to Bank of Ireland and your credit limit will remain the same.

For more information on switching financial providers, visit our Switching Hub.

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