Half or northern consumers say debt is acceptable

Almost half of all consumers in Northern Ireland believe debt is acceptable, it emerged today.

With around 3.2 million credit cards in use in the north and in the Republic a new survey found 43% of consumers in the north felt owing money and living in credit was part and parcel of life.

Market researchers Mintel noted 43% of shoppers north of the border felt credit was occasionally necessary, while 44% of credit card users paid less than the full balance off their card each month.

And with shoppers in the south owing €1.894bn in outstanding personal credit card debt, report author Brendan Gallen revealed stark differences between the way shoppers use their plastic friends on either side of the border.

Ownership of credit cards is higher amongst consumers in Northern Ireland at 46% compared to 34% in the Republic, he said. While multiple ownership of credit or charge cards is much more prevalent in the north.

Mr Gallen said the survey, Irish Credit Cards 2005, showed one third of consumers in the south own two or more cards but a quarter of the northern cardholders owned three or more cards in 2004.

“Another trend is for northern consumers to use their credit card more frequently but on less expensive purchases, whereas consumers in the Republic use their credit cards less frequently but for higher value purchases,” he said.

Mintel revealed the Republic ranked in the top three in Europe in terms of credit card usage and spending.

Despite high banking charges Ireland lagged behind only Britain and Luxembourg in 2003.

The survey revealed credit card fraud in the Republic was estimated at 8-10 million euro each year. But in the United Kingdom the massive scale of fraud was put at £478.8 million for the 12 months up until June 2004.

The Mintel Ireland report found that credit card security and fraud are a major barrier to credit card use for many consumers.

But it said new chip and pin technology in the medium to long term should help increase confidence in using credit cards and therefore will help boost usage.

Mr Gallen said credit card usage had risen as the internet was increasingly meeting consumers demand for flexible banking solutions.

“In Ireland, it is the nature of employment and how it is affecting consumers’ lives that credit card companies must be aware of,” Mr Gallen said.

“One of the main advantages of online credit card providers is that they allow time-pressed consumers to manage their finances at a time and place that suits them, something which consumers are sure to increasingly take advantage of as their confidence in online banking grows.”