I propose to take Questions Nos. 502, 588 and 589 together.
I welcome the NYCI Report which raises many important issues regarding young people and their management of credit card debt and is further evidence of the increased awareness of the importance of consumer protection in the field of financial services. I understand that the Financial Regulator is examining the ‘Can You Credit It' report prepared by the NYCI and this will inform their study of the transparency of information provided to all holders of credit cards.
The Financial Regulator spends significant time and resources informing consumers about the potential risks of credit cards. Publications including credit card cost surveys are available to help consumers choose the card that suits their needs. However, guidance from the Financial Regulator recommends that consumers take on the right type of credit for the right purpose; credit cards are not suitable for long-term debt as the rates are far higher than other forms of credit. The Financial Regulator also issues information to help people who have problems with credit card debt. This information is available through its publications, help-line and website.
All credit card providers must comply with the Regulator's Consumer Protection Code, which states that financial services providers must act in the customers' best interests and only provide financial products that are suitable for the consumer. In addition, there are some specific rules with regard to interest rates and credit cards limits. When a credit institution is changing its interest rates, it must state the effective date of the new rate. It must also update the interest rate details on its information services as soon as the change comes into effect. With regard to credit card limits, they cannot be increased unless requested by the consumer.
The Deputy may wish to note that credit card debt represents less than 2% of personal sector credit and less than 1% of overall private sector credit (PSC), and is one of the slowest growing components of PSC. Credit card data refers to debt outstanding on all credit cards at end-month and includes balances that may be paid in full at the payment due date. The increase in the number of cards issued and the amount of debt outstanding is in line with a general trend of increased market penetration in EU and a move towards electronic retail payment methods.