1-2-3 Finance

Don’t Go Overboard on Credit Card Debt This Christmas

People concerned about how the expenditure over the Christmas period will be funded are being advised to do so with caution.

People planning on funding Christmas by using credit cards are being urged to ensure they pay off the balance as soon as possible.

Chris Whitehead, chief executive of Credit Union Australia, advised that those concerned about meeting the financial cost of presents, food and other seasonal out-goings in the approach to Christmas should try making a list of everything they want to buy in advance.

The next step is to create a budget so they are able to work out how such items can be paid for, something that may help to steer them away from buying on impulse.

In taking this action, he tells the Australian Associated Press that people should be able to avoid starting the new year in a significant amount of credit card debt.

Many shoppers use credit cards to make their Christmas purchases – thinking they can pay the balance off in the new year, Mr Whitehead points out.

However, he claims that although people may be looking to make use of the interest free period deals attached to cards, when such offers end those who have not taken action to make repayments may find themselves suddenly financially overcommitted.

The key is to ensure you are able to pay the balance in full each month, avoiding surmountable debt issues, he adds.

And despite recent research indicating overall growth in outstanding card balance has slowed down, “there is no room for complacency and consumers should continue to pay off any existing credit card debt and spend smartly over Christmas.”

Shopping around for the best offers on goods was among the tips for saving the Credit Union Australia head also recommended.

Tags: christmas credit card debt, credit crunch