CONSUMERS WILL find the stated interest rates payable on their credit cards will rise by up to 3 per cent as a result of the introduction of the EU consumer credit directive introduced in Ireland yesterday.
This is because the directive requires lenders to include all costs to the card-holder when calculating the annual percentage rate (APR) of interest, including the €30 a year annual Government stamp duty; up to now, financial institutions have included only fees, charges and interest when calculating the APR.
However, the new method of calculating charges will not change the cost of the credit card to the cardholder, according to the Irish Banking Federation.
With surveys showing wide variations in the charges imposed by different lenders, the IBF recommends that consumers shop around for the product that is most suitable to their requirements in terms of price, service and convenience.
Customers are advised to contact their credit card issuers with any further queries.
The directive harmonises consumer credit rules across the EU and applies to loans of up to €75,000.
Many of its provisions have already been introduced in Ireland. However, a number of provisions will not apply immediately here; most notably, credit unions have been given an extra 18 months to comply with the directive.