Two Out of Five Use Credit Cards to Finance Christmas

By: Paul McIndoe

Christmas is fast-approaching and everyone in the family will want the latest must have gadgets and toys. As well as the gifts there's all the food, drink and entertainment to pay for, but recent research found that in order to pay for it all last year, two in five people in the UK used their credit cards.

Furthermore the survey, carried out by price comparison website 'Savebuckets', found that one in five is still paying for last year's excesses only eight weeks before this festive season, and by Christmas day almost 17% will not have totally cleared last year's debt. Reaching for the plastic is commonplace when it comes to paying for Christmas, as 41% of UK credit card holders admitted to using their cards to pay for gifts, food and drink, with only 29% of those using their cards in the build-up to the festive season, paying off the full balance in January.

However, the report's authors think that last year's average Christmas spending of ?837 per person was a peak that will not be repeated this year. They point to higher housing and utility costs this year, and the fact that people will have much less cash to splash around; add that to the amount of people who are still paying off last year's bills and the picture looks gloomy for retailers, as well as those still trying to clear last year's bills. Those with balances still remaining on their cards will have spent most of the year searching for new credit card deals with zero-interest balance transfers to which they can transfer their Christmas burden, and make way for this festive season's spending.

Marc Ames of Savebuckets said: "A large percentage of Brits are still struggling to pay off spending from last Christmas. With interest rate rises and the rising cost of living impacting on spending power, it is likely that most of us will be making cut-backs this Christmas."

Indeed, experts that regularly compare credit cards spending levels to those on debit cards are expecting to see more spent using the latter this Christmas as the credit squeeze bites, and people become more cautious about their spending. The writing is on the wall; if you intend using your credit cards to pay for the festive season then make sure you clear it as soon as possible, as you don't want to be paying for it in the run up to next Christmas.

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