Caution Over Credit Cards for Christmas

by : Andy Adams

This year with all the expensive presents we'll be buying many of us will find that we'll be stretched beyond our means. Despite saving for the most expensive time of the year many of us will be feeling the pinch this Christmas, especially with must have items like Nintendo Wiis and iPods topping Christmas lists this year.

The temptation is there for us to charge these expenses to our credit cards or to apply for new ones, but with credit card applications taking up to 6 weeks to process people are getting them as soon as August in order to ensure plenty of time for dashing round the shops.

Ask any money expert and they'll likely tell you not to charge to the cards this Christmas, due to the high prices you'd be paying it could mean that you'll be paying off the presents for the next year or more. Whilst some people are frugal enough to keep extra money aside for the festive period the majority of the public tend to rely on some form of credit or overdraft to make it through. With the household debt for the UK averaging at ?55,403 with ?217Bn of credit debt in the UK it is clear we need to take more care with credit cards over the holiday period.

There is however a way to ease the squeeze by taking advantage of one of the 0% on purchases offers from some credit card companies, this way you won't be paying extra on every gift you buy! Some companies doing this are M&S and GE Money, with many other companies offering 10 months interest free on purchases.

Another alternative is the cashback credit cards on offer; this is where after you spend a certain amount on your card (normally a large sum) you get a certain percentage back. This obviously seems the best idea when it comes to Christmas; these percentages are normally around 1-3% though so it's really nothing to shout about unfortunately. A twist on the cashback card are the reward cards contributing to schemes such as Nectar where you can use points accrued from purchases on goods at participating stores. Quite often these points can be gained though the year in preparation for Christmas.

The only other option is to make sure you save a set amount earlier in the year or over a few months in preparation for Christmas. Experts say it is best not to charge gifts to credit cards at Christmas as chances are unless you've had the forethought to get a new credit card with an introductory offer like the ones mentioned above then you will end up paying more on interest and also increase the debt and repayments on your current card