It’s very easy to overspend in the lead up to Christmas, particularly when everything is paid for with credit.
Here are some tips to ensure you don’t end up with a credit card debt you can’t manage.
• Only use credit when you have the cash
It sounds pretty simple, but lots of people use their credit card to pay for things they cannot afford. Only use your credit card if you have the cash to pay the bill in full at the end of the month. A credit card doesn’t give you additional funds, it just gives you more time to pay for things.
• Resist impulse shopping
Before you hit the shops for those Christmas presents, make a list of what you need and then resist the urge to add impulse purchases unless you really need them. Read catalogues and go online to find the best prices before you leave home.
• Set a limit
When it comes to gift buying, nights-out or holiday activities, set a limit on how much you allow yourself to spend. Also consider reducing your credit card limit down to the bare minimum to avoid the temptation to make purchases you can’t afford.
• Get creative with gifts
As an alternative to store-bought gifts, put on your creative hat and give the gift of your skill and time – babysitting, cooking, car washing, mowing, gardening, computer repairs.
• Be aware of interest-free deals
These are designed to trap you into high interest later on. Circumstances can change quickly and if you can’t pay the balance during the interest-free period, you will be left struggling to pay higher interest charges.
If you are using an interest-free credit card to help consolidate an existing debt, don’t continue to use the card for new purchases. Continue to make repayments to eliminate your existing debt, don’t add to it.
• Spread your costs
Spreading costs out over a longer period of time might make things more manageable. If you know what costs are coming up, ensure you’re setting enough aside each pay to cover them when it arises.
• Seek advice early
If you find yourself in trouble with your finances, always ask for help sooner rather than later. We’re happy to assist where we can, just let us know if you need any help.
