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Credit Products - Ireland - August 2013

“Having peaked in 2008, the value of credit card transactions in Ireland has declined every year since. In 2012, the total value of transactions was precisely 25% down on the level seen in 2008. Although this is partly due to dramatically reduced consumer spending, there has been a noticeable shift away from credit cards towards debit cards – and this may indicate a shift in Irish consumers' attitudes towards credit, borrowing and debt.”

Brian O’Connor, Production Manager

Some questions answered in this report include:

What is the total size of the credit card market in Ireland? – What is the total value of credit card transactions in NI and RoI? Has this been affected by the economic downturn? What shape will the market take moving forward?
What type of credit products do Irish consumers own in 2013? – What credit products do Irish consumers own? Within this, what are Irish consumers' preferred credit products?
What types of behaviour do Irish consumers display when using credit products and facilities? – How do Irish consumers use credit and borrowing facilities? How has restricted access to credit changed how consumers use credit products?
How have attitudes towards debt changed between 2008 and 2013? – What are the prevailing or most common opinions among Irish consumers when it comes to debt? Are consumers less enthusiastic about borrowing money in 2013?

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Table of contents

  1. Introduction

      • Key themes in the report
        • Data Sources
          • Definitions
            • Abbreviations
            • Executive Summary

                • The market
                  • Credit card transactions of €13.85 billion in 2012
                    • Figure 1: Value of credit card transactions, actual, estimated, forecast and projected, NI and RoI, 2008-18
                  • Forecast
                    • Figure 2: Indexed value of credit card transactions, NI and RoI, 2008-18
                  • Market factors
                    • Economic recovery not yet assured in NI or RoI
                      • Unemployment situation unlikely to improve much in near future
                        • Consumer spending still at depressed levels
                          • Confidence down among NI consumers, up among RoI consumers
                            • Average credit card transaction value down in RoI, steady in NI
                              • Losses resulting from credit card fraud down in 2012
                                • Complaints about credit cards largely under control
                                  • Companies, brands and innovations
                                    • The consumer
                                      • Credit cards and mortgages most widely-owned credit products
                                        • Figure 3: Ownership of credit products, RoI and NI, July 2013
                                      • Irish consumers have sensible, cautious approach to borrowing
                                        • Figure 4: Agreement with statements relating to use of credit, NI and RoI, July 2013
                                      • Debts and repayments not dominating consumers' thoughts
                                        • Figure 5: Agreement with statements relating to attitudes towards debt, NI and RoI, July 2013
                                      • Scant support for notion that borrowing can be 'positive'
                                        • Figure 6: Agreement with statements relating to attitudes towards borrowing, NI and RoI, July 2013
                                      • What we think
                                      • Issues in the Market

                                        • What is the total size of the credit card market in Ireland?
                                          • What type of credit products do Irish consumers own in 2013?
                                            • What types of behaviour do Irish consumers display when using credit products and facilities?
                                              • How have attitudes towards debt changed between 2008 and 2013?
                                              • Trend Application

                                                  • Trend: Help Me Help Myself
                                                    • Trend: Return to the Experts
                                                      • Mintel Futures: Old Gold
                                                      • Market Overview

                                                        • Key points
                                                          • Economic recovery remains shaky and uncertain
                                                            • Figure 7: Economic Growth, Actual and Forecast, RoI and NI, 2008-15
                                                          • Longer-term outlook looks better for RoI than NI
                                                            • Figure 8: Economic growth forecast, Average % annual growth, UK, RoI and NI, 2016-20
                                                          • Unemployment stabilising, but little real improvement in store
                                                            • Figure 9: Unemployment, ILO % basis, actual and forecast, RoI and NI, 2008-15
                                                          • Less spending means less need for credit (and credit cards)
                                                            • Figure 10: Private consumption, annual change, actual and forecast, UK (inc NI) and RoI, 2008-15
                                                            • Figure 11: Consumers' expectations for spending in the year ahead, NI, July 2013
                                                            • Figure 12: Indices of total retail sales, volume and value, RoI, 2008-13
                                                          • Consumer confidence dips in NI, but increases in RoI
                                                            • Figure 13: Consumer confidence, NI, Q3 2008-Q1 2013
                                                          • Confidence among RoI consumers at highest level since 2007
                                                            • Figure 14: Consumer confidence, RoI, Q3 2008-Q2 2013
                                                          • Average credit card transaction value down in RoI, steady in NI
                                                            • Figure 15: Average transaction value, credit cards, RoI and UK (inc NI), 2007-12
                                                          • Efforts to combat fraud proving successful in RoI and NI
                                                            • Figure 16: Annual fraud losses on UK (inc NI)-issued credit and debit cards, £ millions, UK (inc NI), 2007-12
                                                          • Losses from card fraud fell by 21% in RoI in 2012
                                                            • Figure 17: Losses resulting from fraud on RoI-issued cards, € millions, RoI, 2008-12
                                                          • Initiatives to increase transparency and responsible lending
                                                            • Banking-related complaints increasing at above-average rate in RoI
                                                              • Figure 18: Complaints received by Financial Services Ombudsman, All and Banking, RoI, 2010-12
                                                            • But credit card providers not the biggest culprits
                                                              • Figure 19: Banking-related complaints, by type of product complained about, RoI, 2012
                                                            • Complaints to UK's Financial Ombudsman up more than 90%
                                                              • Figure 20: Number of complaints lodged with Financial Ombudsman, UK (inc NI), 2009-13
                                                              • Figure 21: Product/sector complained about to financial Ombudsman, % of all complaints, UK (inc NI), 2013
                                                            • Credit card-related complaints account for 25% of all 'banking and credit' complaints
                                                              • Figure 22: Complaints about 'banking and credit' received by Financial Ombudsman, by product type, UK (inc NI), 2013
                                                              • Figure 23: Percentage increase in number of banking and credit-related complaints, by category, annual %, 2013
                                                              • Figure 24: Number of complaints received by Financial Ombudsman UK, credit cards and consumer credit, UK (inc NI), 2008-13
                                                            • Only minority of credit card-related complaints upheld in UK (inc NI)
                                                              • Figure 25: Percentage of banking and credit-related complaints to Financial Ombudsman that are upheld, by category, UK (inc NI), 2013
                                                          • Strengths and Weaknesses

                                                            • Strengths
                                                              • Weaknesses
                                                              • Market Size and Forecast

                                                                • Key points
                                                                  • One million fewer credit cards in issue
                                                                    • Figure 26: Number of credit cards in issue, actual, estimated, forecast and projected, NI and RoI, 2008-18
                                                                  • The vast majority of credit cards in issue in RoI are personal
                                                                    • Figure 27: Number of credit cards in issue, personal and business, 000s, RoI, July 2013
                                                                    • Figure 28: Personal credit cards as a % of all credit cards in issue, RoI, 2004-13
                                                                  • Credit card transactions valued at €13.85 billion in 2012
                                                                    • Figure 29: Value of credit card transactions, actual, estimated, forecast and projected, NI and RoI, 2008-18
                                                                  • Amount owing on credit cards in RoI in decline since 2010
                                                                    • Figure 30: Outstanding indebtedness on credit cards, year-on-year % change, 2004-13
                                                                  • Consumers divided over whether concerned or not about debts
                                                                    • Figure 31: How concerned consumers are with current debts, NI and RoI, July 2013
                                                                • Competitive Context

                                                                  • Key points
                                                                    • Payday loans emerging as real alternative sources of credit
                                                                      • Claims that payday lenders 'exploiting vulnerable consumers'
                                                                        • UK (inc NI) and RoI consumers still drawn to cold, hard cash
                                                                          • Figure 32: ATM cash withdrawals, by volume, value and per capita, RoI, 2005-12
                                                                        • Cash use increased among UK (inc NI) consumers in 2012
                                                                          • Figure 33: Cash withdrawals, by volume and value, UK (inc NI), 2007-12
                                                                        • Debit cards continuing to grow in popularity
                                                                          • Figure 34: Number of debit cards in circulation, millions, RoI, 2003-12
                                                                          • Figure 35: Debit card payments, value (€ billion) and volume (millions), RoI, 2003-12
                                                                          • Figure 36: Number of transactions made with debit cards, millions, UK (inc NI), 2006-12
                                                                          • Figure 37: Value of purchases made with debit cards, £ billion, UK (inc NI), 2006-12
                                                                        • Cheques in decline – but not gone yet
                                                                          • Figure 38: Cheque transactions, volume and value, UK (inc NI) & RoI*, 2007-12
                                                                      • Companies and Innovations

                                                                        • Key points
                                                                          • In January 2013 rte.ie reported LCD credit card
                                                                            • On-screen account information
                                                                              • Ireland embraces contactless technology
                                                                                • PayWag brings a quirky twist to contactless payments
                                                                                  • Credit product company profiles
                                                                                    • Allied Irish Bank (AIB) Group
                                                                                        • Figure 39: AIB credit cards, 2013
                                                                                        • Figure 40: First Trust credit cards, 2013
                                                                                      • Barclaycard
                                                                                          • Figure 41: Barclaycard credit cards, 2013
                                                                                        • Bank of Ireland (BOI)
                                                                                            • Figure 42: BOI credit cards, 2013
                                                                                          • Capital One
                                                                                              • Figure 43: Capital One credit cards, 2013
                                                                                            • Danske Bank
                                                                                                • Figure 44: Danske Bank credit cards, 2013
                                                                                              • Halifax
                                                                                                  • Figure 45: Halifax credit cards, 2013
                                                                                                • HSBC
                                                                                                    • Figure 46: HSBC credit cards, 2013
                                                                                                  • KBC Bank Ireland
                                                                                                    • MBNA Group
                                                                                                        • Figure 47: MBNA credit cards, 2013
                                                                                                      • Nationwide
                                                                                                          • Figure 48: Nationwide credit cards, 2013
                                                                                                        • Permanent TSB
                                                                                                            • Figure 49: Permanent TSB credit card, 2013
                                                                                                          • Santander
                                                                                                              • Figure 50: Santander credit cards, 2013
                                                                                                            • Ulster Bank
                                                                                                                • Figure 51: Ulster Bank credit cards, 2013
                                                                                                            • The Consumer – Ownership of Credit Products

                                                                                                              • Key points
                                                                                                                • Credit cards most widely owned 'credit product' among Irish consumers
                                                                                                                    • Figure 52: Ownership of credit products, NI and RoI, July 2013
                                                                                                                  • Credit card ownership high among all ages – except 18-24s
                                                                                                                    • Figure 53: Ownership of credit cards, by age, NI and RoI, July 2013
                                                                                                                  • Mortgage ownership at highest among consumers aged 35-54
                                                                                                                    • Figure 54: Ownership of mortgages, by age, NI and RoI, July 2013
                                                                                                                  • ABC1s twice as likely to own mortgages as C2DEFs
                                                                                                                    • Figure 55: Ownership of mortgages, by social class, NI and RoI, July 2013
                                                                                                                  • Personal loan ownership peaks highest among 35-44s
                                                                                                                    • Figure 56: Ownership of personal loan, by age, NI and RoI, July 2013
                                                                                                                  • Overdrafts used more often by men and ABC1s
                                                                                                                    • Figure 57: Ownership of overdraft, by gender and social class, NI and RoI, July 2013
                                                                                                                  • The 'old' and the 'very young' most likely to be debt-free
                                                                                                                      • Figure 58: Agreement with statement, 'I do not have any outstanding debts', NI and RoI, July 2013
                                                                                                                  • The Consumer - Use of Credit

                                                                                                                    • Key points
                                                                                                                      • Generally sensible, cautious approach to using credit
                                                                                                                          • Figure 59: Agreement with statements relating to use of credit, RoI and NI, July 2013
                                                                                                                        • Aversion to borrowing increases with age
                                                                                                                          • Figure 60: Agreement with 'I try to minimise my use of credit/borrowing facilities', by age, NI and RoI, July 2013
                                                                                                                        • Confidence in 'responsibility' highest among ABC1s
                                                                                                                          • Figure 61: Agreement with statement, 'I think I use credit in a responsible way', by gender and socio-economic background, NI and RoI, July 2013
                                                                                                                        • The recession has been an 'attitude changer' for older consumers
                                                                                                                          • Figure 62: Agreement with statement, 'The economic downturn has seen me keep a closer eye on my finances in general', by age, NI and RoI, July 2013
                                                                                                                      • The Consumer - Attitudes towards Debt and Borrowing

                                                                                                                        • Key points
                                                                                                                          • Negatives of borrowing eclipse the positives for Irish consumers
                                                                                                                              • Figure 63: Agreement with statements relating to borrowing and debt, NI and RoI, July 2013
                                                                                                                            • Young in NI most likely to see borrowing as a last resort
                                                                                                                              • Figure 64: Agreement with statement, 'Borrowing money should be a last resort', by age, NI and RoI, July 2013
                                                                                                                              • Figure 65: Agreement with statement, 'Borrowing money should be a last resort', by gender and socio-economic background, NI and RoI, July 2013
                                                                                                                            • Consumers not obsessing over debts and repayments
                                                                                                                              • More 'comfort' than 'concern' when it comes to debt
                                                                                                                                • Presence of children a major factor in determining comfort or concern
                                                                                                                                  • Figure 66: Agreement with statement, 'I feel comfortable with the amount of debt that I have ', by presence of children in the household, NI and RoI, July 2013
                                                                                                                                  • Figure 67: Agreement with statement, 'I have concerns about my level of debt', by presence of children in the household, NI and RoI, July 2013
                                                                                                                                • Women more inclined than men to not think about their debts
                                                                                                                                  • Figure 68: Agreement with statement, 'I try not to think about my debts, by gender, NI* and RoI, July 2013
                                                                                                                                • Men more inclined to see a strategic role for borrowing
                                                                                                                                • Appendix

                                                                                                                                  • RoI Toluna tables
                                                                                                                                    • Figure 69: Ownership of credit products, by demographics, RoI, July 2013
                                                                                                                                    • Figure 70: Ownership of credit products, by demographics, RoI, July 2013 (continued)
                                                                                                                                    • Figure 71: Ownership of credit products, by demographics, RoI, July 2013 (continued)
                                                                                                                                    • Figure 72: How concerned consumers are with current debts, by demographics, RoI, July 2013
                                                                                                                                    • Figure 73: Agreement with statements relating to credit products, by demographics, RoI, July 2013
                                                                                                                                    • Figure 74: Agreement with statements relating to credit products, by demographics, RoI, July 2013 (continued)
                                                                                                                                    • Figure 75: Agreement with statements relating to credit products, by demographics, RoI, July 2013 (continued)
                                                                                                                                  • NI Toluna tables
                                                                                                                                    • Figure 76: Ownership of credit products, by demographics, NI, July 2013
                                                                                                                                    • Figure 77: Ownership of credit products, by demographics, NI, July 2013 (continued)
                                                                                                                                    • Figure 78: Ownership of credit products, by demographics, NI, July 2013 (continued)
                                                                                                                                    • Figure 79: How concerned consumers are with current debts, by demographics, NI, July 2013
                                                                                                                                    • Figure 80: Agreement with statements relating to credit products, by demographics, NI, July 2013
                                                                                                                                    • Figure 81: Agreement with statements relating to credit products, by demographics, NI, July 2013 (continued)
                                                                                                                                    • Figure 82: Agreement with statements relating to credit products, by demographics, NI, July 2013 (continued)

                                                                                                                                Companies Covered

                                                                                                                                To learn more about the companies covered in this report please contact us.

                                                                                                                                Credit Products - Ireland - August 2013

                                                                                                                                £1,095.00 (Excl.Tax)