Over half plan to pay off their Christmas debts 'immediately'

More than half (51%) of people using credit to fund this year's festivities plan to repay it 'immediately', according to research from the Money Advice Service.

This means that they will pay little or no interest - depending on how they borrowed in the first place. It's good to know that the majority of people will be taking out Christmas credit knowing that they can easily repay it.

The research also shows that people are trying different methods to minimise financial 'damage' over the festive period.

For example, relatively few (26%) are considering funding Christmas with a credit card, compared with cash (72%). Paying with cash can be a useful tactic to help you keep track of your spending - as you can physically see how much money you're handing over.

People also plan to cut back on their spending to make Christmas more financially manageable by:

  • Buying cheaper gifts (45%)
  • Buying fewer gifts (34%)
  • Cutting back on 'luxuries' (31%)

There are some areas where the majority of people draw the line, however. Very few (2%) plan to cut back on children's activities over Christmas, only 4% would cancel their TV subscription and just 2% would cancel their mobile phone tariff.

On top of the savings people are planning to make, half of respondents said that they'd consider earning some extra spending money over Christmas, for example by:

  • Selling unwanted goods online (34%)
  • Selling possessions at a car boot sale (16%)
  • Taking on an extra job (12%)

Less popular ways of boosting Christmas earnings included renting out a parking space or spare room (2%) and starting a dog-walking business (3%).

An expert from debt management company Gregory Pennington said: "It's good to see that people are thinking about the effect Christmas has on their bank accounts, and making plans accordingly.

"Tactics like finding a bargain on Christmas presents, and even selling unwanted goods, can really make a difference for many people.

"If you're struggling with debts, however, funding Christmas can be difficult no matter what money-saving methods you try. The best course of action in this case is to seek expert advice. A debt professional can talk about your circumstances with you and help you to decide how to tackle your problem debts."

Helen Gradwell

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