How credit cards work

A credit card is a convenient way to make purchases or payments, giving you access to a set amount of credit that you can repay later.

You can use your credit card to pay for goods or services in-store, online, or by phone, and in some cases, to withdraw cash.

Each month, you’ll receive a credit card statement showing:

• What you’ve spent
• Your total outstanding balance
• Any fees, charges or interest
• The minimum payment required (3% of your balance or €6.35, whichever is higher)
• The payment due date

You then have two payment options:

• Pay the full balance by the due date - this helps you avoid interest on purchases, or;
• Pay a smaller amount - interest will apply to any remaining balance.

If you do not pay your statement balance in full by the payment due date, interest will be charged on the unpaid amount. If a previous statement balance was not paid in full, interest will continue to accrue on the outstanding balance until it is repaid in full.

Rates may vary depending on how the card is used, for example:

• Purchases - interest is charged at the annual purchase interest rate on any balance not paid in full by the due date.
• Cash withdrawals or advances - interest is charged at the annual cash advance interest rate and is usually charged from the day of withdrawal.
• Balance transfers from other cards - interest is charged at the annual rate on Balance Transfers. Not all our cards offer Balance transfers

Payments are applied to balances on your account in a specific order. They are first used to pay interest and fees from previous statements, followed by cash advances and purchases from previous statements. Any remaining amount is then applied to transactions shown on your current statement. The way payments are allocated can affect the amount of interest charged on your account.

You can compare our interest in this credit card interest rates overview, or look through this guide for typical questions about our fees and interest rates.

In addition to interest, we may charge certain other fees, such as:

• Cash Advance Fee
• late payment fees
• returned payment fees
• over-limit fees
• foreign exchange fees (when spending abroad or in non-euro currencies)
• copy sales voucher fee
• copy statement fee

We will also charge an annual Government Stamp Duty of €30 per credit card account.

You can see our charges in this overview.

Your credit limit is the maximum amount you can spend on your credit card. It’s based on your income, outgoings, financial commitments, and your credit history – and is set during the application process.

You’ll see your credit limit on your monthly statement, and you can check it anytime using internet banking or the mobile app.

You can change your credit limit. If your situation changes, you may apply for an increase or decrease, and we will carry out a credit assessment.

The APR shows the yearly cost of using a credit card-including interest and fees-making it simple to compare cards from various providers.

We display a Representative APR for each card, based on an assumed credit limit of €1,500 (inclusive of the €30 government stamp duty), repaid in 12 equal monthly instalments. You can find APR details for our cards here: AIB Credit Card Rates.

If you clear your balance in full and on time every month, you can avoid paying interest on purchases. pay your full credit card balance by the due date every month, you can benefit from up to 56 days of interest-free credit on purchases.

Here’s how 56 interest free credit works:

• You make a purchase at the start of your billing cycle
• You don’t pay interest on that purchase until the due date following your next statement
• This gives you up to 56 days to pay for that purchase without interest

To keep this benefit, you need to pay your balance in full and on time every month. If you pay only the minimum or miss a payment, we will charge interest and you may lose the interest-free period for future purchases until you clear the balance.

A credit card can help you manage your finances - but only when used in a way that suits your needs and budget. Here are some tips to stay in control:

• Pay your full balance monthly, if you can, to avoid interest.
• Make at least the minimum payment on time.
• Keep your balance at a level you can comfortably repay.
• Avoid using your credit card for frequent cash withdrawals.
• Tell us if your situation changes - we can help if you have trouble with repayments.

If you have any questions about how credit cards work, or need help managing your existing card, our team is here to help. Call us on 01 668 5500 9:00-17:00 Monday to Friday (except bank holidays) or visit your local branch.