Credit consumption and debt accumulation among low-income consumers:key consequences and intervention strategies

Reflecting the US and Europe, changes in attitudes to money, spending and saving have led to an acceptance that spending and credit are part of modern Irish consumer society. Increasing access to credit, aggressive marketing tactics and asymmetric information between borrower and lender is prevalent, particularly among those in the lower-income, vulnerable categories, who may not have the same range of choices as higher-income customers (Kempson et al., 2004; Conroy and O’Leary, 2005). As there is a paucity of analytical and academic commentary within an Irish context, this research explores the current nature of credit consumption and debt accumulation among low-income groups in Ireland. Qualitative supply-side research was conducted through a series of in-depth interviews with key informants of support agencies and financial institutions in Ireland involved with consumer credit and debt. In addition, focused consumer research was conducted with a sample of MABS clients and their advisors in the Mid West region. This research identifies critical factors related to both credit provision and debt accumulation. Key intervention strategies are proposed in relation to consumer education, financial services regulation and targeted support by voluntary and government agencies.