Christmas in April? One in seven still paying for the holidays
By UK CreditCards.com
Although Christmas was more than three months ago, a study by Halifax indicates that many people still have Christmas-related debts on credit cards or in the form of overdrafts or personal loans.
Brits struggling with festive hangover
The bank commissioned the survey of 2,032 people between March 16 and 18. Researchers found that, overall, 14% of respondents were still paying for last Christmas. Younger consumers (between the ages of 18 and 44) were the most likely to still be paying for the holidays (20%). Older consumers, meanwhile, seem to have done a better job of either saving in advance or spending within their means, as just 9% of the over-45 crowd said they were still paying holiday debts.
Credit cards a popular choice for Christmas spending
Nearly one in 10 of those surveyed still had Christmas-related spending on their credit cards, according to Halifax. Just 4% of respondents said they were still in their overdrafts, while 3% said they had an outstanding loan from Christmas.
Many will still be in debt by Christmas 2012
A significant proportion of Britons still expect to be paying for 2011's festivities by the time next Christmas arrives. Of those with outstanding debts, 9% said they do not anticipate being debt-free in time for December 2012 and could be facing repayments well into 2013. For them, the overall cost of Christmas 2011 will be inflated by the large amounts of interest they are required to pay.
"We all face unforeseen costs from time to time, but Christmas shouldn't be one of them," said Anthony Warrington, head of current accounts at Halifax, in a statement. "If it's December before you think about how to pay for it, it's too late. Christmas is an expensive time of year as it is, but not budgeting for it well in advance can cost you more in the long run."
Balance transfer cards could provide relief
While Warrington's words may be sound advice for those without debts, it comes too late for those who allowed themselves to get into debt. However, there are still ways to be proactive and pay down the debts of Christmas past.
One solution could be to transfer the outstanding debt onto a new credit card with a lengthy balance transfer period. A quick online comparison should reveal a wide range of these cards, some of which offer 0% on balance transfers for 12 months or more. This will enable those who are still paying for last year's holiday to catch up on their debts without the added worry of interest repayments.
When doing a balance transfer, be sure to be on your best debt-repayment behaviour. Making a late payment or exceeding your credit limit could cause your balance transfer deal to be revoked -- and you could get stuck paying the interest you were hoping to avoid.
Published: 11 April 2012
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