Credit Cards In Ireland and Associated Stamp Duties

GroceriesToday while shopping for groceries at Whole Foods Market we were delighted to meet John* who is an old friend of ours. After doing our groceries we spent some time to catch up with each other.

Life presents challenges to everyone. And sure enough John has had his share too. Change is the most constant thing in our lives today. Instead of harboring fear, if we face life's changes with a positive attitude it definitely helps us grow stronger. John also has a similar perspective :). He was narrating about how he was gaining strength with each passing day once he started viewing each situation as an opportunity to expand his consciousness.

IntelligentJohn hails from Ireland. He is a techie who came to US on a work visa. The present economy has not spared him. Recently he got laid off from his job. Since the market is tight most companies are not willing to sponsor him for a visa. So he has decided to return home. Being a smart guy, he was simultaneously looking for employment in Ireland too. He got lucky since he has already landed a couple of good offers. You may say that in a way he is looking forward towards returning home. We felt happy for him :).

During our conversation we discussed various personal finance issues associated with his return to Ireland. In the process we came to know about some interesting facts about credit cards in Ireland. John said that he will no longer be able to change his cards as frequently as he did in USA. The reason being the fact that he has to pay something called "credit card stamp duty" to the Irish Government. This was something out of the blue! We were amazed to hear that he has to pay money to the government for using a credit card.

ConversationJohn went on to say that Ireland had the unenviable title of being the only country in the world to impose a credit card stamp duty. And his country earns a lot of revenues by levying this duty on its citizens. At present, every credit card account is charged at a rate of €40 annually. However there is a silver lining.

If we have one credit card account which has two or more cards attached to it (for example a joint account), we'd need to pay only one stamp duty since it is applied per account. Also, while changing to a different credit card one does not have to pay the credit card stamp duty more than once. But we need to close the old credit card account. Why you may ask?

Well, when we close our old credit card account our card issuer will give us a letter of closure stating that we have paid our annual stamp duty. Only when we give this letter to our new card issuer will we not be charged stamp duty by them for that specific year. Else we might have to end up paying again. John said that it was extremely important not to lose the letter since only one original letter of closure can be issued. However if you lost it you'd need to go through an intricate process to obtain a duplicate. So theoretically John can change his credit card account as often he likes without paying extra duty (during the year), as long as he keeps transferring a letter of closure between the card issuers each time.

Plastic MoneyNow that is not the end of the story. There is more to it. Stamp duty does not end with credit cards alone. The Irish government extracts more money from its citizens by charging stamp duty upon plastic cards, such as debit laser cards and ATM cards. One needs to pay an annual stamp duty of €10 on every debit laser card or ATM card, or €20 annually on every combined Laser/ATM card. The worst part is that unlike credit cards, stamp duty on debit laser and ATM cards is charged for each and every card on our account. Which means that if John has a card for himself, an additional one for his wife, and a third card for his child, he would have to pay the associated stamp duty three times annually!

When John finished sharing these facts we were stunned! Boy, are we glad that we live in US? You bet we are :). We hope that Uncle Sam does not join his Irish brother (government) in generating millions of dollars by charging us taxes (aka stamp duty) for using plastic money.

All The BestJohn bid us adieu and we wished him the very best in life. We drove back home hoping that our economy recovers at the earliest. Else who knows what new taxes we'd be paying (for using the basic necessities of life) in the name of kick starting the US economy.

Let us know how you feel about this issue and Ireland's stamp duties. Looking forward towards hearing from you. Have a nice weekend :).

*Names have been changed to protect the privacy of the individuals involved.

Image Source(s): iStockPhoto