Number of credit cards down 500,000 from boom years
Consumers are ditching their credit cards in record numbers, and also paying down the debt on them.
There has been such a frenzy of consumers getting rid of the expensive cards, that householders now have 500,000 fewer than during the boom.
Financial experts said consumers had wised up to the perils of high-cost lending on the plastic payment methods.
Failing to pay down a credit card before the interest-free period expires will trigger interest-rate charges of up to 22pc.
Almost €1.3bn has been paid off credit card balances since the levels of debt on them peaked in 2008, an analysis of Central Bank figures shows.
Financial experts said that this was rational behaviour by stretched consumers as they realise that credit cards are among the most expensive forms of borrowing.
And in another indicator that we are falling out of love with means expensive paying for things, the average spend on a credit card has fallen heavily since the boom.
The average amount spent on cards is down from a peak of close to €500 per card a month in 2008, to under €400 per card now.
The overall amount outstanding on credit cards has fallen from a high of €3bn at the end of 2008 to €1.7bn now. That is a fall of 43pc.
However, card debt normally peaks in January.
Over the past eight years of austerity, the interest rates charged on credit cards have shot up - as banks attempt to return to profitability by increasing fees, charges and interest rates on a range of products. But the Government and the Central Bank is trying to get us to use credit and debit cards, and lessen our use of cash.
Finance Minister Michael Noonan recently called on shops to cut their prices after new lower fees for retailers when processing debit and credit cards came into effect in early December.
And in a further move to incentivise electronic payments over the use of cash, the Government announced in the last Budget that it was imposing a 12c charge for ATM cash withdrawals, up to a limit of €5.
There are close to 1.5 million personal credit cards in active use, with almost 4m debit cards actively in use, according to Central Bank figures.
With a debit card you can only spend money if you have it in your current account. Credit cards are a form of high-interest borrowing.
The figures show that 8.5pc of all credit card users smashed through their card limit in October.
A Central Bank spokesman said this works out at 51,000 credit card accounts, most of which are held by consumers.
And exceeding the approved credit limit will mean charges of between €7 and €8.50, depending on the card provider.