In the lead-up to Christmas, Credit Unions of Wales – the association of the country’s 18 credit unions – is spearheading the campaign ‘Credit2Wales’ to protect people from high cost credit providers.
According to the Money Advice Service, more than one in six people in Wales are at risk of being unable to keep up with credit repayments.
Marking the launch of Credit2Wales, patron of Credit Unions of Wales, Jane Hutt AM, said: “Unmanageable debt isn’t just a finance issue. It impacts all elements of our lives, including relationships, work, health, mental health and, of course, the ability to look after our families.
“Credit isn’t bad, we all need help sometimes, especially at Christmas, but it should be fair and manageable. We must refuse to allow ourselves, our families and our communities to fall prey to high cost lenders, and stamp them out by turning to credit unions instead.”
Credit Unions of Wales compared the cost of an iPad with a well-known rent-to-own company against buying it on the high street using a credit union loan. The rent-to-own retailer would charge a 99.9% APR interest rate, meaning the total repaid over two years would be £676. This was at least £254 more than borrowing from a credit union – almost enough to buy another iPad.
Andrew Johnson, advice manager at the Money Advice Service, said: “Credit unions are financial co-operatives, owned by the people who use their services, and not by external shareholders or investors. Where profits are passed on to their members in the form of better rates and lower fees when compared to high cost credit alternatives.
“At a time when people are more likely to seek high-cost short-term credit, access to affordable credit and understanding your options is vital.”
Credit Unions of Wales recommends that people look at the interest rate, term of the loan (how many weeks, months or years) and total amount repaid to be sure they are getting the best deal.
The campaign will encourage people to use the social media hashtags #credit2wales and #credydigymru.
