Countdown to Christmas- Christmas on Credit

Christmas is for most people, a joyous occasion that we spend with our families and friends. But 2020 may be a little different to what we’re used to.

With over 1.6 million people currently out of work, and the numbers expected to rise to 2.6 million by mid-2021, it’s important we don’t overstretch ourselves and cause long term consequences, such as a debt spiral.

Borrowing to cover the cost of Christmas

Needing to keep up with the times and an increase in pressure to gift the latest gadgets can often leave families struggling to afford the cost of Christmas which then leaves them struggling with their debts in the New Year. With the average family spend increasing by over £800 in December compared to other months, it’s time to consider whether using credit to pay for gifts & the overall cost of Christmas is really worth the debt burden it leaves behind.

A survey found that those who intend to use credit to cover Christmas will take an average of 7 and a half months to pay it back; so how we can avoid getting into debt or creating a financial fiasco for one day of the year? Avoid using credit – sounds simple!

If you’ve been used to using credit in previous years, it can be difficult to break the cycle, but we all have to start somewhere! If you’re currently paying off debts from previous Christmas spends, try to get it paid off as early in the year as you can, that way, you’ll be able to start saving for next Christmas ahead, reducing the need for credit and breaking the cycle of being in debt.

Christmas Top Tips

Stay debt free – Don’t borrow! Easier said than done, we know… But maybe 2020 is the perfect year to set the standard for how gifting should be in future. Try adapting your gifts to what you can afford, rather than the other way around; this can help you stay debt free.

0% Credit Cards – If you really must use credit, it’s important to find the best deals; try to get a 0% card with a realistic interest free period to give you time to pay it back. Uswitch offers a comparison service so that you can find one to suit your needs.

Buy Now Pay Later – These help you avoid interest by paying back before the interest free period ends. It’s vital you do this, or you could be met with a chunk of interest to pay back too.

Payday & Doorstep loans – Avoid at all costs! Can’t get a low interest deal? Consider not buying what you can’t afford. These types of loan generally have extortionate interest rates and can often see you paying back more than double what you borrowed! These can often be the start of a debt spiral too, which you really want to avoid.

Paid early in December? January feels like the longest month of the year anyway, but this can be made worse by spending your December salary early! Try to buy everything you need with your November wage to avoid being skint for the first month of the year!

Break the habit – Can you start saving each month rather than using credit? Speak to your employer about whether they can set up a Christmas savings club, or a trusted family member or friend, if you think you won’t be able to keep your hands off it!

Get debt advice – If you’re struggling with budgeting and covering the cost of credit repayments, we’re on hand to offer support and advice on how this can be changed. Staying debt free can feel like a mean feat, but we’re on hand – speak to one of our expert debt advisers or use our Online Debt Advice Tool today!