Top tips for keeping costs down during Christmas

With Christmas fast approaching, moneysupermarket.com offers ten top tips for consumers looking to reduce the burden on their festive finances.

1 Avoid store cards

Beware of the allure of store cards; although the idea of an immediate discount on Christmas gifts or money back may seem like a good idea, the interest rate on purchases is likely to be highly uncompetitive; even the best are inferior to regular credit cards. Unlike normal credit cards, store cards are handed out by potentially untrained checkout staff with no understanding of customers' financial circumstances.

2 Supermarket credit cards can offer super value

Supermarket credit cards on the other hand often have competitive rates and are linked with their loyalty schemes. For example if you use a Sainsbury's credit card, you will receive zero per cent on purchases for 10 months but also double nectar point for two years.

3 Balance your funds with a zero per cent purchase card

For those with insufficient savings, trying to fund the whole event through their December salary can be a bit of a stretch. If you do need to borrow over the festive period, a credit card offering zero per cent interest on purchases might be the cheapest option. However, make sure you borrow within your means and can pay the debt off within the introductory period - you don't want to be paying for this year's Christmas presents, when the lights are switched on again next year.

4 Cash in with a cashback credit card

Cashback credit cards give you money back every time you spend on them, no matter where you spend. Get a cash back card at the start of the year, and use all the cash back from spending throughout the year to put towards next Christmas. The current best buy is the American Express Platinum Cashback credit card, where for every pound spent, consumers can gain an extra five per cent cashback.

5 Shop around for loans

Be careful when applying for a loan before Christmas, despite advertised rates barely moving, lenders often tighten criteria on personal loans in the run up to Christmas. Borrowers need to shop around for the best deals and ensure they only apply for products they're likely to be accepted for and that suit their needs. With lending criteria becoming more and more stringent, it's important to keep your credit record as clean as possible and not taint it with failed applications for loans

6 Be aware of costly savings clubs

This year has seen a rise in the popularity of savings clubs as consumers hit by the recession try to put their money aside for Christmas. The schemes work by locking away savers cash over the year and providing them with vouchers to spend during the festive season. Consumers should be aware that whilst saving throughout the year is commendable, these schemes do not offer any real service to consumers over and above locking away their money. They fail to provide interest payments and can actually charge customers over the odds for the goods they buy at the end of the year.

7 Use the internet to research prices

Avoid impulse purchases and research prices before you buy. Comparison sites are great for finding out where to get the best deals and can give an indication on availability. Many online retailers offer web only deals and some offer free standard delivery. Also, keep your ears open for retailers going into sale early and make the most of any special offers or BOGOF deals.

8 Grab yourself a bargain, use a discount voucher

There are hundreds of downloadable vouchers and discount codes to be found online which can help you make big savings on your Christmas shopping. Try using voucher websites such as moneysupermarket.com/vouchers or go to retailer websites directly. According to research by moneysupermarket.com 46 per cent of people plan to use as many discount vouchers as possible to cut the cost of their Christmas gift shopping.

9 Set a budget and stick to it

Regardless of how consumers fund Christmas, it's important they understand how much they can afford to spend during the festive season. It's easy to get carried away with Christmas spending, so by working out exactly what to they need to buy and sticking to a strict budget, consumers can avoid ending up in the red come January.

10 Make saving your resolution for 2010

If you're funding Christmas with debt this year, make sure next year is different; start saving into a regular savers account early in the New Year for a stress free festive season in 2010.

Kevin Mountford, head of banking at moneysupermarket.com, said: "Christmas can be a difficult time of year financially and the current economic climate is not making things any easier. Although there are a few options to spread the financial load at Christmas, the ideal time to start preparing is January. Preparation is the key to a hassle free festive season and savvy consumers with savings will be able to start the New Year without the burden of a Christmas - debt hanging over them."