Surge in requests to credit unions for debt help
THE number of people applying for credit union loans to clear existing credit card debts has doubled in the last year.
And households are already looking for money to see them over the Christmas period -- much sooner than would normally be expected.
The umbrella group for credit unions in Ireland confirmed yesterday that pressures of the recession were resulting in people stacking their debts on to credit cards.
They are then applying to the credit union for money to clear the cards.
Mark Bailey, president of the Irish League of Credit Unions (ILCU), said the number of people approaching them to clear credit-card debt had doubled in the past 12 months.
"What we are seeing is that there is a lot of credit card debt in households and we are being asked to pick up on that," he said.
"Some of our members are coming to us to say they are in trouble, could they have a loan? When we ask what it is for, they say for credit cards.
"Every credit union looks at it individually. I would say we are looking at the loan applications considerably greater than we were previously, based on the ability to repay.
"There is no point in us taking over the debt of other people and then letting them off the hook."
Credit unions are also now seeing applications for loans to cover expenditure on presents and festivities over the Christmas period.
These would normally not come through until the middle of November, Mr Bailey said.
Since the recession has taken hold, there has been a marked increase in the number of people who are approaching credit unions for money who weren't previously associated with them.
Credit unions are now being "more stringent" about who they lend money to, Mr Bailey said -- an action similar to that being taken by the banks.
"Our loan books are falling but we are receiving an awful lot more applications for smaller loans, everyday loans and back to school. We are seeing an awful lot more of them than previously," he said.
Yesterday, the ILCU launched the annual All-Ireland schools quiz, which will see some 25,000 schoolchildren take part in 300 venues.
Reality-TV star Brian Dowling, who will act as quizmaster in the final of the event at the RDS next April, launched the quiz in the Central Model School in Dublin's north inner city.