The National Consumer Agency has published consumer research, carried out on behalf of the Agency by Behaviour & Attitudes, which shows a significant increase in the number of consumers who are making larger cash withdrawals and using their debit cards less often as a result of losing their free banking.
According to the research, more than a third (34%) of current account customers said they no longer qualified for free banking. These customers were then asked if the loss of free banking in the last year prompted a change in the ways they use their account. 28% of them said they take out more cash when making withdrawals, almost double the figure (15%) from the previous year. A quarter (25%) also stated that they use their debit cards less often compared to 13% twelve months ago and 13% are using their credit cards more for routine transactions. Furthermore, approximately a third of consumers who no longer qualify for free banking said that they intend to use their debit card less often and/or switch to a bank that offers free banking or lower fees.
Commenting on the results, Fergal O’Leary, Director of Public Awareness and Financial Education at the National Consumer Agency, said: “It is clear that consumers are altering their behaviour to reduce costs in light of changes in charging structures on current accounts. The research clearly shows that many consumers are making larger cash withdrawals and using their debit cards less, which is a concern in the context of the National Payments Plan and its objective to increase the use of electronic forms of payment such as debit cards.”
The research also found that:
- 57% of all current account holders have never checked to see if there is a better deal or package available elsewhere;
- 6% had switched their current account in the last twelve months with 8% planning on switching accounts in the next 6 months;
- 32% of current account customers can still avail of free banking, down from 37% in June 2013; and
- 1 in 7 (14%) of current account holders don’t know whether they are being charged fees;
Mr. O’Leary added, “Consumers should be aware of the charges they are paying for using their current account as the cost can be significant over the course of a year. Consumers can make changes to how they use their current account to reduce these charges, for example using the cashback option to get cash when you use your debit card to pay in a shop. Also, while there is now much less choice in the current account market, the current account cost comparison on consumerhelp.ie shows all of the fees and charges for the current accounts in the market so you might be able to switch and get a better deal. We also have detailed information on how consumers can reduce their banking fees.”
