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Don't be quick to borrow and slow to pay - even during Covid-19 times

You could end up worse off than where you stand now if you borrow for a short-term fix, writes Louise McBride

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Before relying on a credit card to get you through a rough patch, remember the interest charged could be almost eight times more expensive than the interest on your mortgage.

Before relying on a credit card to get you through a rough patch, remember the interest charged could be almost eight times more expensive than the interest on your mortgage.

Before relying on a credit card to get you through a rough patch, remember the interest charged could be almost eight times more expensive than the interest on your mortgage.

The impact of the Covid-19 crisis on people's day-to-day finances could really hit home by the end of summer - and see more people reach for expensive short-term loans, the State's money advice service has warned.

"In the first three months of this crisis, people may have had a bit of a [financial] cushion - but if people's income doesn't pick up in the next three to six months, that's when they will be unable to cope with their outgoings," said Ursula Collins, regional manager with the Money Advice and Budgeting Service (Mabs) in south Munster. "We think August or September could be the time particular sectors are hard hit. We are hearing a lot of anxiety and concern from people who are worried about what will happen in three to six months' time - they're worried they might not get their job back or that they may not be going back on the same wage. So people could start to reach for short-term finance in the next three to six months."

Although the Government recently extended its dig-outs for those hit hard by the pandemic, these supports are due to end in August. The pandemic unemployment payment (PUP) is set to finish on August 10 while the temporary wage subsidy scheme will remain in place until the end of August. While mortgage payment breaks of up to six months are available from the banks for those impacted by the Covid-19 crisis, a number of banks have indicated that a further extension will not be available.