6 Christmas credit card tips for shoppers

By UK CreditCards.com

Households are gearing up for an expensive festive period against the growing possibility of a slip back into recession. In light of the unfavourable economic climate, many consumers are keen to come up with ways to save money and reduce the financial impact of Christmas.

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Here, CreditCards.com takes a look at some tips provided by the Consumer Credit Counselling Service (CCCS) and the Finance & Leasing Association (FLA), which have teamed up to help Brits plan their holiday spending.

1. Spread the cost with a 0% credit card.
One way that Britons can ease their financial woes this month could be to compare credit cards and find one with a lengthy interest-free period on purchases. This would enable them to spread the cost of the festive period over several months without accruing interest. Consumers can perform a credit card comparison easily online, but will need to move fast in order to receive their new card in time for Christmas.

2. Avoid applying for every credit card promotion you see.
Britons should remember to shop around for a good credit card, rather than simply take one offered by their bank or based on marketing material. However, applications leave a mark on people's credit record, so it is important not to apply for too many credit cards in a short space of time, as this could give lenders the impression that an applicant is desperate for credit and less likely to make their repayments on time.

"With many families keeping a careful eye on their Christmas spending, up-front planning is essential," said Fiona Hoyle, head of consumer finance at the FLA. "Good deals are available on credit cards and in-store when using store cards or store instalment credit. But before using credit, think how you're going to pay it back and what the best product is for you."

3. Hit the sales.
Many shops are already holding sales and this can be a good way to save money when buying Christmas presents and food. However, Britons should remember not to get carried away and exceed their budget.

4. Keep money back for January bills.
Shoppers should remember not to spend every last penny, as there are bound to be bills to pay in January. In particular, those who do their spending on a standard credit card with no 0% period should try to pay their balance off in full in the new year to avoid accruing interest.

5. Speak to lenders at first sign of trouble.
Anyone with financial problems during the festive period should contact their lender as soon as possible to explain their situation. It may be possible to come to an agreement over repayments, rather than waiting until a payment has been missed.

6. Contact a debt advisor if necessary.
Britons should also not be ashamed to contact a debt advisor if they are having problems with their finances. Debt charities such as the CCCS or Citizens Advice offer impartial guidance and can be a great source of help in hard times. Delroy Corinaldi, external affairs director at the CCCS, observed that people can be hit hard by the emotional impact of slipping into debt. "It is crucial that they don't suffer alone and seek the help that is available from debt charities," he advised.

See related: Mobile purchases of Christmas gifts set to double; Study: Nearly half of Brits haven't saved for the holidays

Published: 6 December 2011