Charlie Weston: It's time that we cut our dependence on the banks
COULD we do without banks? Maybe not, but we could certainly lessen our dependence on them and might be wise to do so given the raft of product price rises they are pushing through.
AIB and Bank of Ireland are increasing the interest rates on a number of credit cards, Bank of Ireland is increasing loan and overdraft rates, while most lenders are about to follow Permanent TSB's lead by hitting standard variable rate mortgage holders with higher rates.
And it is getting harder to open a new credit card account or switch accounts, or to get a personal loan, while the impending closures of Halifax and Postbank will reduce the choice and competitive edge in the market.
If you have a job or a pension, you need a bank account as most employers will not pay you cash these days. But you can lessen the use of your bank, which makes sense when banks are effectively asking their customers to make up for losses on lunatic commercial property loans.
Here's the plan: cut up your credit card, never run up an overdraft and only get loans from a credit union.
Credit cards are ridiculously expensive and getting dearer. Cut yours up and get a loan to pay it off.
Instead, you can use a debit card, such as Laser or Visa, for most transactions these days where before you could only use a credit card. The advantage of a debit card is that you can only spend what you have in your current account.
If you find you still need a credit card then get a virtual card such as 3V, which you pre-load with cash in a retail outlet. Alternatively, get a pre-paid Mastercard from the likes of Neteller.com.
Overdraft rates are also enough to make you weep. Rates of 14pc or 15pc are not unusual. Then there are surcharges of up to 12pc on top of this if you end up with an unauthorised overdraft.
Why not get friendly with your local credit union?
Also essential is to ensure you are not letting any large cash amounts build up in your current account. This is because if you are earning any interest on this at all it is likely to be paid only on the first €1,500. Scour the market for the best rate.
For three and five years' fixed it is hard to beat the tax-free rates on offer from An Post bonds and certificates.
Only buy services and products you need from your bank. Do not be persuaded to buy something you do not need.
Let's put manners on our badly behaved banks.