Homeowners using credit cards to make ends meet

Struggling homeowners are using credit cards to make ends meet every month while 40% of households have had to borrow money over the past year to pay their bills.

The shock findings are contained in the second Irish League of Credit Unions (ILCU) What’s Left tracker survey, which shows disposable income in many homes has dwindled significantly as the full impact of the recession takes hold.

It has found more than 1.8m people are left with €100 or less each month after bills are paid. In addition, on average, households owe €1,000 on their credit card, and one-quarter of all credit card holders rely on that credit to make ends meet every month.

Despite the over-reliance on credit, more than half of those with a credit card do not know the interest rate they are paying. Some 69% of those surveyed have less disposable income than was the case 12 months ago.

Either mortgage or rent payments take the biggest chunk of money from households each month, followed by groceries and utility bills. Those bills have increased, with 79% of those surveyed claiming their electricity bills have risen by an average of €39 in the past 12 months, while 75% said their gas bill had risen by an average of €40.

Worryingly, almost half of all households, some 47%, struggle to pay all their bills on time, with 44% of those who cannot pay their bills claiming they are very stressed and worried.

The financial squeeze on households also includes work-related expenses: childcare claims an average cost of €520 per month with fuel costed at an average of €145 per month.

The ICLU has called for the Government to put a legal cap on the interest rates charged by moneylenders, with some charging APR just shy of 190%.