WALES, U.K.–With Christmas approaching, Credit Unions of Wales, which represents the 18 credit unions in the country, has launched a campaign called “Credit2Wales” aimed at providing people from high-cost lenders.
According to one analysis, as many as one-in-six people in Wales is unable to make payments on their debts.
“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,” said patron of Credit Unions of Wales, Jane Hutt. “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.”
Financing an iPod
As an example of what a difference loan terms can mean, Credit Unions of Wales compared the cost of an iPad from a well-known rent-to-own company against buying it 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, Credit Unions of Wales reported.
“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,” said Andrew Johnson, advice manager at the Money Advice Service.
The campaign by Credit Unions of Wales is recommending 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.