Three-quarters of Irish people clear their entire credit card bill every month, but 10 per cent don't even know how much they owe, according to a new Irish Times/ MRBI survey. Just 1 per cent of those with cards admitted that they did not meet their last minimum payment.
The survey results demonstrate that Ireland still lags far behind most developed countries in the spread of plastic money. Just over one fifth of Irish adults have credit cards, compared to the US, where 80 per cent have at least one card, and many have several.
This information points up a significant opportunity for European and US banks wishing to expand. Consumers can anticipate a period of intense competition as these companies try to attract new customers. Currently, credit cards in the Republic carry high interest charges, ranging from 18 to 24 per cent, but such competition could force these rates down.
According to the survey of a representative sample of 1,000 people across the State, 21 per cent of adults - and an equal number of men and women - have credit cards. Of these, 74 per cent said they cleared their balance in full the last time they got a bill. Some 16 per cent paid off somewhere between the balance and the minimum payment, while 6 per cent paid the minimum.
The survey shows a difference in approach by men and women to their credit cards. Some 80 per cent of men cleared their bills, and 12 per cent paid more than the minimum, compared to 69 per cent of women paying everything, and 21 per cent clearing somewhere between the balance and the minimum.
A remarkable level of just 1 per cent of all adults admitted they paid "less than the minimum", while a further 3 per cent said they did not know what they had done. Every single Dubliner questioned insisted that he or she had at least paid the minimum amount.
People living in Dublin are also more likely to have a credit card, and to spend more with it, than those outside the capital. Some 30 per cent of Dublin residents have their own plastic, against 18 per cent in the rest of the State. And while 18 per cent of cardholders outside Dublin charge more than £250 a month to their cards, 41 per cent of Dubliners spend in excess of this amount.
But the majority of all Irish adults still keep their credit card bills low - two thirds spend less than £250 a month, with just 8 per cent between £501 and £1,000 and 2 per cent - a tiny number, all of whom are Dublin-based - charging up more than £1,000.
The Irish Times/MRBI survey also includes details of the credit limit set by the banks for their customers, and over which they may not spend without risking either financial penalties or rejection of the card by shopkeepers.
Of those with credit cards, 40 per cent have a credit limit of £1,000 or lower, and a further 30 per cent have limits ranging from £1,001 to £2,000. Some 15 per cent are set at between £2,000 and £3,000, and less than one cardholder in 10 - 9 per cent - claimed to have a credit limit of more than £3,000.
This aspect of the survey also reveals differences between Dublin and the rest of the State and along male/female lines. In Dublin, 32 per cent of those with plastic credit said their limit was more than £2,000, compared with 19 per cent of those outside the capital. Perhaps reflecting the fact that men on average still earn more money than women, a gap opens up along gender lines as the credit limits climb higher. While 14 per cent of men and 15 per cent of women had limits between £2,001 and £3,000, just 5 per cent of women had a limit of over the £3,001 mark, compared with 14 per cent of men.
Overall, 6 per cent admitted that they simply did not know their credit limit.
A more detailed look at the latest figures shows that 66 per cent of the ABC1F1 market research category professional and white-collar workers and larger farmers still do not own a credit card. Banks are sure to target this sector in the months ahead.
Many will also try to seize the chance to attract Irish people aged between 18 and 34; marketing specialists regard this as a key section of the population for purchases which require a large disposable income, and the survey shows that 80 per cent are still cardless.
Consumer analysts will also take note of the difference in the paying patterns of men, 80 per cent of whom clear their entire balance, and women, 69 per cent of whom start afresh each month. While men may feel somewhat chuffed that their gender is more reluctant to pay up to 2 per cent interest per statement, such diligence is unattractive to credit card companies.
Women can argue that more of them are making the best practical use of the card, using the credit facility to flatten the highs and lows of their spending demands over several months. This approach is the one favoured by lending institutions, which regard such users as their most responsible and prized customers.
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