Brits set to put Christmas on credit

Credit Reference Agency Callcredit is predicting a rise in consumer borrowing following its analysis of the latest Bank of England statistics on borrowing and lending.

Credit card borrowing for December 2006 made up 60% of net credit card lending for the whole year and experts warn that this is likely to rise in December 2007.

“From our review of these statistics, and in spite of the widely reported credit crunch, we’re still anticipating that many consumers will turn to credit at Christmas in order to fund their spending,” explains Mark Ward, Head of Consumer Services at Callcredit.

“Worryingly, it could be these people who may find it more difficult or expensive to borrow on credit. Our own research shows that 75% of consumers believe that they’re not responsible for overindebtedness, but it is important to remember that responsible borrowing goes hand in hand with responsible lending. Consumers need to look closely at their own borrowing habits and take control of their finances before they get into financial difficulties.”

With this in mind Ward offers the following tips to help consumers stay out of the red this Christmas:

Callcredit’s Top Tips on controlling your Christmas spending

Get smart with your credit card - remember that credit card purchases accrue interest and that cash withdrawals on a credit card are charged at a higher interest rate than purchases

Get a copy of your credit report to see your credit score and to check your outstanding balances across all your cards

Don’t bury your head in the sand. If you are concerned about repaying your Christmas debt contact the lender concerned and explain your circumstances to them.

If things get really bad, seek advice from a professional organisation such as the Citizens Advice Bureau or Consumer Credit Counselling Service