Fears over 'rates on credit card' scheme
A DECISION to give Ulster consumers the option of paying their forthcoming rates bills by credit card could plunge many households into further debt, it has been claimed.
Calls have been made for Finance Minister Sammy Wilson to scrap the new payment method available on the bills, which will arrive through letter boxes from April 1.
In a statement, the Consumer Council said they had "serious concerns" and warned that interest rates on credit cards were at a "12-year high".
They claimed the lack of available cash would make the new alternative more "appealing".
"In the current economic climate we believe having the option to pay a household bill by credit card presents more risks than benefits," a spokesperson for the watchdog said.
"If customers feel they have no other choice but to pay a regular household bill by credit card, it is often a symptom of a wider debt problem.
"Credit card payments for regular household bills could push already vulnerable people into a desperate situation from which they feel they cannot escape," the Consumer Council added.
SDLP finance spokesman Declan O'Loan added his voice to the calls for the credit card payment to be scrapped.
"When people use credit cards to pay their rates, there is a two per cent handling charge, which on average amounts to a 15 sting in the tail for consumers," said the North Antrim MLA.
"Although credit cards seem like a good option for people paying their rates, as they may not have money readily available due to the tough financial climate, their interest rates are at a 12-year high and they can create long-term difficulties for many consumers, resulting in a mountain of debt," Mr O'Loan added.
Assembly member Dawn Purvis MLA said credit cards would only "stack up problems for later".
"I am concerned about the knock-on effects this will have and the problems it will mask," she said.
"My constituency office is inundated with those suffering financial hardship. This move has the potential to push more of them towards the poor house. I would call on the Minister, Sammy Wilson, to reconsider this decision."
According to the Consumer Council, Northern Ireland comes bottom of the UK league when it comes to being financially savvy and decreasing numbers of consumers are paying off their credit balance in full each month.
Responding to the criticisms, the Land and Property Services said both they and the finance minister were "conscious" of the dangers of the new option, but said they wished to provide ratepayers "with a choice of payment methods".
The department said the decision had been made after a review involving public consultation.
"We will keep the impacts of offering payment of rates by credit card under careful review, and will continue to work with the Consumer Council on this and other matters," they added.
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Tuesday 14 February 2012
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