Avoid Getting into Debt This Christmas

Christmas is surely one of the most expensive seasons of the year, making it easy to get into a financial rut.

11:11 24 December 2014

Who does not like grottoes and mistletoes; carols and parties; the smell of pine needles; and smiling faces all around and some little kids gazing up in awe at the Christmas trees? No matter if you are festive minded or a minimalist, unless you know what you are spending on, Christmas will push you towards debt.

What is worse is the fact that several Britons who are already in the red- in the form of loans, overdrafts, and credit cards- are approaching this festive season with strained finances.

We will go over a couple of points following which you can make sure you do not slip into the red.

Minimise debts

Save up. You heard it right. Save up for the festive season. Even if you did not this season, do it next time around. Unfortunately, not many British households enjoy the luxury of spare cash now, leaving many of them with no choice but to borrow money. If you are thinking about taking a loan, make sure that it does not cost you a fortune. There are several things a consumer can do to lessen the impact of taking debts this season.

Opt for credit with low interest rates

How much your loans cost you depend mainly on the interest rate you are asked to pay- and this can differ largely depending on the type of loan taken and the lender itself. Some people will use their overdrafts, some will settle for credit card debts, whereas the majority of the rest will take out a loan exclusively to manage their Christmas expenditure. All these people will pay different interest rates depending on the kind of credit they take on.

Don’t fixate on the initial rates that you are supposed to pay. Also think about how soon it is likely to pay off your debts, and whether you can repay in fixed monthly instalments.