A CAMPAIGN has been launched to help prevent residents getting into too much debt this Christmas.
North Tyneside Citizens Advice Bureau (CAB) has joined forces with North Tyneside Council to advise residents to think carefully before taking out a payday loan.
The new campaign in the run up to Christmas aims to raise awareness of the high interest rates of payday loans.
It follows a debt advice project that looked at the trends in payday loans – designed to allow people to borrow money for bills until their payday – taken out between May 2010 and June 2012.
The project found a large increase in people borrowing from high interest payday lenders between these dates and particularly over the festive period.
Mark Almond, North Tyneside CAB director, said: “The growth in borrowing from payday lenders is worrying – the loans are becoming a big part of the overall debt levels for residents of North Tyneside.
“The extremely high interest rates of the loans, often over 1,000 per cent, mean people rack up large amounts of debt very quickly. And in turn, this increases the problems of clearing the money they owe.
“Before taking out a loan, the CAB encourages people to review their finances and if they still feel the loan is needed, we would urge people to shop around for the best deal.”
Coun George Westwater, cabinet member for community and regulatory services, said: “In the current economic climate and as Christmas approaches, it can be a difficult time for residents financially.
“However, I would urge any residents in financial difficulties to seek help as early as possible.
“North Tyneside CAB can help people avoid financial stress and leave them less likely to become reliant on credit and spiralling debts.”