FAMILIES are increasingly relying on their credit cards in a desperate bid to balance the household finances.
A new survey shows that households are racking up close to €500 a month on their cards in a bid to run their homes.
The use of high-cost credit cards comes despite a rise in the numbers of people saying their disposable income has gone up.
Research commissioned by the Irish League of Credit Unions (ILCU) shows that there has been a fall in the numbers who say they have nothing left each month once they pay essential bills such as groceries, mortgages and utility charges.
But close to one-third of adults are using credit cards to pay bills. The average debt being run up on the plastic cards is now €2,480, up from €2,400 last September, according to the research carried out for the ILCU by iReach among 1,000 adults.
Some 2.62 million people have a credit card. This represents around three out of four adults, the survey, called the What's Left Tracker, found.
Three out of 10 adults admitted falling behind on their credit card bills, but this is fewer than a year ago.
More than half of those surveyed were not aware of the interest rate on their cards.
Interest charged on cards is notoriously high. AIB charges 22.7pc on both its Mastercard and its Visa cards for purchases. Bank of Ireland will scrap the free borrowing period from mid-March, imposing a 26pc annualised rate on cash withdrawals.
Close to 140,000 had their credit card account shut down by their provider last year, the research indicates. Reasons were not given, but are likely to do with people consistently failing to make repayments and include breaking credit limits.
Around one in eight people said they had more disposable income, when they were interviewed in December.
There has also been a rise in the numbers saying they were able to save money every month.
Chief executive of the league Kieron Brennan said the improvement in household finances was either down to the recovery taking hold, or may be due to the fact that more people have adapted to the tough conditions.
Despite the improvements, there are still close to 500,000 people who say they have nothing left once they have paid all their bills each month.
The average income, after tax, is €2,700 a month. An average household has €367 left at the end of a month, after paying all the bills. This is up from €326 last September.
"We can see that disposable income is continuing the creep upwards and more people now find themselves in a position where they are able to put a small bit away in savings every month and this certainly correlates to what we are seeing across the credit union movement and what our credit unions are telling us," Mr Brennan said.
Charlie Weston Personal Finance Editor