With weekly payment stores charging several times the actual value of goods, and payday lenders offering easy money at exorbitant rates of interest, people are being encouraged to save themselves from unfair and unmanageable debt.
The council is working with Prince Bishops Community Bank and the North East First Credit Union, the two main credit unions for County Durham, to help spread the word that they can offer sensible loans and effective savings to their members.
Cllr Neil Foster, Cabinet member for economic regeneration, said: “Christmas is meant to be a time of happiness and joy but with parents feeling under immense pressure to buy their children the latest toys and gadgets it can also be a time of great stress and worry about money.”
As part of its support for the credit unions, the council has funded a new Apprentice-themed promotional video to alert people to the dangers of using weekly payment stores. It highlights how a loan from a credit union could save Christmas shoppers £1,000 by allowing them to buy a £500 iPad outright instead of signing up for weekly payments and eventually shelling out over £1,500 for the same item.
Cllr Foster continued: “The video highlights just one of many stories we’ve heard as part of our ongoing work with the credit unions. A loan from a credit union can stop you having to pay three times as much for the same item at a weekly payment store or save you from paying hundreds of pounds in interest payments on short-term payday loans.
“This year we’re desperate to encourage people to give themselves a truly merry Christmas by talking to their local credit union instead. They lend money to their members even if they’ve got a poor credit history but they won’t charge over the odds to do so. And if you’re looking for someone to save with, you can help your local community at the same time by saving with a credit union, knowing you’ll be helping to put loan sharks and people that prey on the vulnerable out of business for good.”
People can save with confidence with County Durham’s credit unions as, like all banks and building societies, they are regulated by the Prudential Regulation Authority, the Financial Conduct Authority and are part of the Bank of England’s financial compensation scheme. They currently have over £3 million deposited with them and council staff alone have saved and borrowed over £750,000 with credit unions over the last 3 years through a salary savings scheme.
People can see the video and find out more about their local credit unions at www.durham.gov.uk/financialhelp. Also on the website is a link to a host of information for anyone having trouble managing their money or dealing with debt.