Credit cards

Credit cards are a convenient and flexible way to pay for things without having to carry cash. And if you use them wisely, credit cards can be one of the cheapest sources of credit available.

With a credit card, the money you spend is a loan from your credit card provider. Your credit card provider sets the maximum limit you can spend on your card (listed on your statement), which you can spend either straight away or gradually over a period of time. Under the Central Bank’s Consumer Protection Code your credit card company cannot increase the limit on your card without your permission.

Each month, your credit card provider will send you a statement that shows:

  • How much you spent since the last statement
  • Any cash you withdrew using your card
  • Any interest due
  • The total balance – this is the amount you owe
  • The minimum payment that must be made by a set date, called the due date. The minimum payment is usually around 2% to 5% of the total amount you owe. But you should try to pay off all or as much as you can of your monthly balance. If you only pay off the minimum balance on your credit card each month, it will cost you a lot in interest and could take several years for you to pay off a large balance.

Think about setting up a direct debit to pay your credit card bill every month before the due date. This helps you to avoid late payment fees and also helps you to keep your credit card debt under control. You can set up a direct debit for a certain percentage of the bill, or a certain amount every month so that you are not tempted to only pay the minimum balance.

If you are worried about credit card debt, check out our information.

Last updated on 8 November 2023