All I want for Christmas is more debt?

Christmas Turkey

If you’ve received a credit or store card offer by post or email, then think hard before applying, even if you think Christmas is going to be tough without one – your debts might soon become a Christmas turkey that you don’t want.

This is an experience typical of many Payplan clients. Although the festive season is a wonderful time of year, all too many of us get carried away buying presents for Christmas and attending parties, Christmas dinners and the desire to buy lavish gifts for our loved ones. We are bombarded by advertising, everyone claiming to be offering the ‘essential Christmas gifts’, and there are literally hundreds of credit and store cards falling over themselves to help us buy this stuff. Understandably, it can be all too easy to spend more money than you can really afford.

UK personal debt is growing by £1 million every four minutes and the hundreds of credit and store cards on the market are being blamed. Take a credit card debt of £1,500. If you’re charged 1.5% a month and only ever pay the minimum monthly requirement of 2% of your outstanding balance, this bill will take an astounding 37 years to clear, and at the cost of thousands of pounds of interest!

tinsel tree.jpg It is estimated that over 10% of us are still paying for last Christmas, and yet, at Payplan, we see these same people brandishing the credit card or store cards once again. Many store cards have APRs of nearly 30% and are targeting the most vulnerable who are having difficulty getting credit elsewhere.

Worse still, if you use your credit card to withdraw cash, the Interest rates can average 23% and are charged from the date of withdrawal. You can also expect to pay a fee of up to 3%.

Would you still withdraw £500 on your credit card if you knew that by making only the minimum repayments you’ll repay over £1,400? That’s nearly double the original amount in interest alone.

Artificial Christmas?

So what’s our advice? Christmas Day is, when all said and done, just another day, and taking advantage of easy credit can leave you with the disadvantage of difficult debts. Avoid the temptation to take out expensive credit you can’t afford just for the sake of one day.

If you’re on a tight budget then remember that your friends and family would probably consider that togetherness, fun and laughter are the secrets to a fabulous Christmas. So, for those of us that are lucky enough to spend Christmas with our nearest and dearest we should relax and enjoy the time spent with them. That doesn’t need to cost anything.

“All I want for Christmas is…”

Payplan can offer budgeting and free debt advice before and after
Christmas on freephone 0800 280 2816 or by submitting your details online using their debt assessment

Written by on November 29th, 2007

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