The country's biggest issuer of plastic says there was limited take up for the 0% interest that it used to offer for balance transfers for the first six months.

Instead customers will be offered 6.9% interest on balances as well as new purchases for 12 months.

AIB also plans to hit big spenders from October with a flat fee of 2.54 every time they exceed their credit limits. And customers who use credit cards to get cash could end up paying more as AIB changes the way it calculates interest so that the clock starts ticking from the date the cash is withdrawn rather than from the last statement date. However, the bank insists that customers who pay their card debts in full and on time have nothing to fear because they will never pay interest on cash advances.

However, abolition of 0% interest comes as a blow to so-called "rate tarts" who move their balances between lenders to avoid paying any interest on their cards.

According to the Financial Regulator's most recent credit card survey, three credit card companies still offer interest-free balance transfers: National Irish Bank, Tesco and Ulster Bank. MBNA charges 1.9% on balances switched from other cards, while Bank of Ireland and Permanent TSB charge 2.9%.

TAX CUTS WIPED OUT BY RISING COSTS
All of the tax cuts in last year's Budget giveaways have been lost to rising mortgage repayments and higher energy bills according to a top economist.

Brian Cowen cut taxes by 900m last December, largely by lifting the 20% income tax band to 32,000 and increasing the employee tax credit to 1,490. The move put an extra 1,700 in the pocket of a double-income family earnings 80,000 this year says Austin Hughes, chief economist at IIB Bank.

But he estimates the same family need to find 2,500 just to cover higher mortgage payments, petrol prices as well as gas and electricity bills.

"People risk disappointment if they are banking on their SSIAs maturing to deliver the promised land, " he said.

According to research commissioned by IIB, almost half of all consumers see soaring energy costs as the biggest threat to the Irish economy, while one-infive believe that rising interest bills pose the greatest risk.

"Taken together, these elements suggest a drain on household spending power is regarded as a major issue for the coming year, " says Hughes. "But if consumers are cautious in regard to the broad economic outlook, they remain confident in the Irish housing market, with 89% expecting house prices to rise further in 2007."

MORTGAGE SWITCHING CAN BE PROFITABLE
It might cost 1,000 to switch mortgages, with most of the money disappearing in legal outlays, but that has not stopped thousands of home owners from looking for a better deal.

Almost 13,000 people switched lenders in the first half of this year, according to new figures from the Irish Mortgage Council.

The switching market is even bigger when people who move lenders when trading up the property ladder are included.

The financial payoff can be considerable, especially if you have got the mortgage under control.

For example, National Irish Bank charges 3.79% interest on a tracker mortgage if the loan is less than 60% of the value of your home. This is considerably less than the 4.5% interest paid by many home owners who are still stuck on lenders' standard variable rates.

With the average mortgage switch being 227,000, this translates into a potential saving of 1,050 a year by moving to NIB's 60% tracker.

Another option is Bank of Scotland's switch and save mortgage package. This gives a two-year introductory discount, currently 3.45% if the mortgage is less than 75% of the value of your home, followed by a tracker rate of 4% interest. Bank of Scotland will also pick up the legal bills for making the move.