Be a smart Christmas shopper

As demands on people’s finances are increasingly pushed to their limits national charity Citizens Advice is urging everyone to avoid a debt hangover and become a smart shopper as Christmas approaches.

Citizens Advice bureaux always see a surge in new debt enquiries after the Christmas festivities are over. The main problems last year were with arrears on loans and hire purchase, catalogue and mail order debts, credit card debts and overdrafts – and people looking for information on bankruptcy.

To help people manage their money for a debt free Christmas, Citizens Advice has joined forces with Barclaycard to issue ten top tips to avoid a Christmas debt hangover, available online or in a handy credit card sized leaflet from bureaux:

Plan early for Christmas
Be realistic and budget accordingly. Work out how much you are going to spend on each person – and stick to it. Manage expectations as to what you or Santa can give.

Don’t forget the everyday bills
Remember that rent, the mortgage, utility bills, food bills, council tax and other existing debts still have to be paid – and the consequences can be severe if they’re not. Even though it’s Christmas, get your priorities right.

Don’t bank on an overdraft
If you do need more money, don’t just run up an overdraft without talking to your bank first – it will work out much more expensive.

Keep things simple
If you can afford to pay for your goods outright by cash, cheque, or debit card, don’t be persuaded to take out extended credit agreements unless they really do work out cheaper.

Shop around
Try as many different places as possible to find the best price. Buy what you want and not what other people say you need. Be wary of extended warranties; the cost of a repair could be less than the cost of the warranty and remember you have consumer rights to reject goods that are faulty.

Buy safe to be safe
Whatever the deal, whatever the temptation, don’t buy from traders you don’t trust and don’t borrow from unauthorised lenders. The initial savings and convenience may prove to be a false economy.

Read the small print
Check for hidden extras in any credit agreement. Work out the total amount payable. Ensure that the monthly instalments are within your budget before signing. Interest free credit can seem attractive, but if you don’t pay on time, or miss a payment, you could have to pay a lot more.

Do your own credit checks
If you are going to use a credit card, shop around and compare terms. Some cards charge high interest rates, but provide interest free periods or discounts. Budget for all these costs and put the payment dates in your diary.

Be organised
There’s a lot to remember at Christmas. If you’ve borrowed money don’t forget that it won’t be long before you have to make a payment. Make sure you pay on time, even if it is only the minimum, or you will be faced with additional charges.

Start planning and saving for next Christmas
Once Christmas is over, it’s worth looking at what you did well and what you didn’t. Learn from your mistakes and start planning how you will do things differently next year. This might also be a good time to start saving for next Christmas.

Teresa Perchard, Director of Policy for Citizens Advice said: “It is very easy to get carried away at Christmas and spend on the spur of the moment, especially if people leave it until the last minute. But every year, we see a huge increase in debt problems immediately afterwards. With a little forward planning, Christmas panic buying can be avoided. We hope that these top tips will help people take control of their money as Christmas approaches so they do not start the New Year with a debt hangover.”

Elizabeth G. Chambers, Chief Marketing Officer at Barclaycard added: “We are delighted to have supported Citizens Advice with the development of these common sense tips to avoid the financial pitfalls of the festive season.”