Willie Penrose (Longford-Westmeath, Labour)
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Question 104: To ask the Tánaiste and Minister for Finance his views on the effect that the relentless pace of interest rate increases over the past 15 months may be having on families with high credit card debt; if there are plans to increase the resources of MABS in view of the difficulties that families are having in meeting existing debts given the eight successive interest rate rises since December 2005; and if he will make a statement on the matter. [17171/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The role of the Consumer Director in the Financial Regulator includes monitoring the provision of financial services to consumers. In that context the Financial Regulator has prioritised the provision of information for consumers about the potential risk of excessive credit card debt. Credit card cost surveys have been undertaken by the Financial Regulator and are available to help consumers in assessing the appropriateness of using a credit card and to help choose the credit card that best suits their financial needs. The Financial Regulator recommends that in particular, consumers take on the right type of credit for the right purpose and has highlighted that credit cards are not suitable for long-term debt as the rates are considerably higher than for 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 (www.itsyourmoney.ie).

All credit card providers must comply with the Financial Regulator's Consumer Protection Code. This requires financial service providers to ensure that any financial products provided are suitable for the needs of the consumer. 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. Credit card limits 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. In addition, 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 credit cards issued and the amount of debt outstanding is in line with a general trend of increased market penetration in the EU and a move towards electronic retail payment methods.

The Money Advice and Budgeting Service (MABS) which falls under the remit of my colleague, the Minister for Social and Family Affairs, is a national, free, confidential and independent service for people in debt, or in danger of getting into debt. MABS offices throughout the country work with people in order to assist them with their financial planning and budgeting for the future. The 2007 budget for MABS is €17.7 m.