The Bank of Ireland has recently introduced a very canny product to the market that's a credit card and personal loan combined, giving the account holder some very flexible ways to make large purchases without attracting the large interest rates that are normally associated with credit cards.
Any customer that makes a large purchase on their card, and is unable to repay it in within the statement date has the option to transfer the balance to the personal loan part of the product. That currently offers a discounted 6.9% interest rate for 12 months, giving the cardholder a year to pay off their loan before the interest reverts to the higher credit card rate of 14.9 %.
Even better, and as an incentive to new customers, the card offers an introductory 0% rate on purchases for the first six months. But the real beauty of this product is the sheer convenience. If you want to make a major purchase that you know you could pay off within a year there is no need to waste time having to compare loans and the rates charged, then request quotes before submitting an application and waiting for the cash to go into your account. You can simply transfer the credit card balance to the personal loan part of the product, freeing up the credit card element of your account to be used in an efficient and cheaper way.
Of course, there is a catch. To make use of the personal loan aspect of the product the minimum amount must be â‚?500, and only two purchases can run on the payment plan at any one time. In terms of the transfer amount, a maximum of 80% of the credit limit for that account can be transferred. That aside, using the repayment facility would still prove cheaper than most of the personal loans on the market. The average personal loan rate in Ireland is between 9.7 per cent and 12.2 per cent and the average overdraft rate is in excess of 15 per cent, meaning that anyone utilising the repayment element of the 2 in 1 account would make a significant saving on the interest paid.
There is no doubt that this product would prove very extremely popular if it was introduced into the UK loans and credit card market, so you can be certain that banks and building societies in the UK will be keenly watching how this product performs.
