'Struggling' Wolverhampton families warned not to turn to loan sharks this Christmas
MORE 'struggling' families starting to feel the pinch in the run up to Christmas will be tempted by loan sharks, a community bank has warned.
The Wolverhampton City Credit Union is urging families not to be swayed by high-interest lenders enticing them with promises of quick cash before the festive season begins.
Manager Matt Goulding is now calling on councillors across the city and community groups to alert residents of the dangers of getting into 'problem debt'.
He said: "It’s still 10 weeks to Christmas, but already people are feeling the pressure to spend. We’re saying to our members, whatever you do, don’t go near the high interest lenders to pay for Christmas.
"You’ll be left with a massive financial hangover in the New Year. Most parents worry about keeping their children happy.
"It’s thought families will spend an average of £800 on Christmas though our members say they’re planning a more modest budget of between £250 and £500.
"At the same time, people are facing rising prices, falling wages and cuts in benefits.
"Given these financial pressures, more could be tempted to turn to payday and doorstep lenders and the rent-to-own stores who all charge high interest rates. Worse, some could feel forced to turn to loan sharks."
A survey carried out by the Worcester Street group revealed 21 per cent of members are already feeling 'very stressed' about Christmas, with about 45 per cent worrying about how they will fund the festivities.
About 40 per cent of members also claimed too much pressure is placed on families to host the 'perfect' Christmas, Mr Goulding said.
The not-for-profit community bank, which launch 15 years ago and now has almost 8,000 members, is planning on sending out a 'Christmas Survival Kit' in the coming weeks.
It will boast advice to members on how to budget for the festive season, as well as how to make savings, resist pressures to overspend and spread the costs through low interest loans.
Mr Goulding added: "We’d urge people on low incomes or those with a less than perfect credit history to turn to us first. We encourage all our members who borrow from us to save a little too so they start building up their financial resilience.
"We treat every loan application individually and will only lend what people can afford to repay. Some high interest lenders are nowhere near as scrupulous: they’re in the business for big profits."
Last year, the credit union - which is run by volunteers - saved its members £145,000 on high interest loan repayments.
Families living or working in an area with a WV postcode of Wolverhampton or South Staffordshire can join the credit union for free.
For more information call 01902 572340.
