Recession survival kit

Personal banking

THE AVERAGE cost of running a personal current account is about €100 a year although it depends on the bank.

Bank of Ireland, for example, charges 28 cent for every transaction unless you qualify for fee-free banking which is harder than you might think.

At least €3,000 has to be lodged into the current account during the quarter and you must make at least nine debit payments from that account using Bank of Ireland’s phone or online banking service but they can’t include standing orders or direct debits. If you have €3,000 and leave it in your current account you will avoid fees of €100 a year but lose €100 in potential interest by putting it somewhere smarter.

The National Consumer Agency has a cost comparison of current account charges available on www.nca.ieto help work out what account is cheapest.

It is important to sign up for online banking and to play the banks at their own game. For instance, if Bank of Ireland insists on nine debits a quarter and you top up your phone or pay down your credit card using its website, don’t do it in one go. Do it in nine increments, it is ridiculous but their fault and it will save you money.

Abandon cheques, they attract ridiculous fees.

Hang on to your statements, if you ever need a duplicate you will be hit with charges wildly out of proportion to the cost to the bank, and always manage your account carefully – according to the Central Bank, charges rise from an average of €86 a year to €231 for people who incur “out-of-order” charges.

When it comes to credit cards the trick is not to run up any kind of balance but, failing that, – as most of us do – there are other things that can be done. Minimum payments are never in your interest. If you owe €10,000 and pay off the minimum each month, it will take over 20 years to clear the card and cost almost €9,000 in interest repayments.

Switch to a zero-interest option. Both the EBS and MBNA have 0 per cent interest on balance transfers for the first 10 months. while Permanent TSB and Tesco will give 0 per cent for six months.

This can really make a difference. If you were to move an outstanding balance of €10,000 from a card with an APR of 16.5 per cent to a zero interest option you save almost €850 in interest payments in the first six months alone. Switch again at the end of the introductory period and you will quickly find yourself mining deep holes in your debt mountain.

A canny consumer could switch four times over the next 30 months and not have to pay any interest on their credit card debt.