Avoid holiday debt regret in 2011

By UK CreditCards.com

Christmas can be expensive.

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Recent research from savings provider ING Direct found that the average Brit expects to spend £490 on Christmas. Similar research in Ireland found that the average spend over the festive season is €545 (around £460).

2010 saw more Brits than ever dip into their savings to pay for Christmas. So, to avoid holiday debt regret in 2011, it's vital that you plan for Christmas in advance.

Avoid leftover credit card debt
Millions of Brits use their credit cards to fund the purchase of Yuletide gifts and other items. However, a recent survey found that half a million Brits will still be paying off 2010's credit card debts next Christmas.

To avoid having to pay your holiday credit card debt for the rest of the year, why not consider saving for the festive season in advance? 

Open a regular savings account
Nearly one third of those people polled by ING Direct said that they planned to use savings to pay for Christmas rather than their credit cards. And, one of the best ways to save for holiday presents, food and entertainment is to open a regular savings account.

Regular savings accounts generally pay a high rate of interest if you commit to making a payment to your account every month.You can typically save between £25 and £250 per month. Although, to earn the higher rate of interest, you will generally need to commit your savings for a full year without making a withdrawal.

Through regular savings, you can benefit from a great rate of interest and build up a nest egg in order to buy all your Christmas presents. That way, you won't have to fund the festive celebrations on your credit card.

"It seems that Britons are determined to spend the New Year rebuilding their savings balances, rather than paying off large credit card bills, which can only be a good thing for family finances," said Richard Doe, chief executive of ING Direct.

See related: Getting to grips with credit card debt; Credit card purchases fall 3m from 2009 to 2010; Online credit spending averages £192 a month

Published: 17 February 2011