People 'should be not relying on credit cards'

By Sarah Engle, Fri 5 Mar 2010 - Published in Credit Cards

Consumers have to end their reliance on credit cards, an expert has suggested.

Mark Lyonette, chief executive at the Association of British Credit Unions Limited, agreed that the products are "fabulously convenient" as they can be used in millions of shops across the globe.

However, he added: "[The credit union sector] had the choice to do credit cards probably about seven or eight years ago and took the view that actually they were not a good product generally."

Mr Lyonette, who was speaking at the Northern Money Conference 2010 at the Contemporary Urban Centre, pointed out that credit card companies view people as excellent customers if they meet their minimum payment.

He explained that this can lead to problems, such as people balancing an unmanageable amount of debt across a number of credit cards and not being able to reduce the amount they owe.

Recent research from Moneyfacts.co.uk showed that interest rates on credit cards are currently at a 12-year high, with the average standing at 18.8 per cent.

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