Do you have a festive financial hangover? - Credit cards - News - Moneyfacts

News

Do you have a festive financial hangover?

Do you have a festive financial hangover?

Category: Credit cards

Updated: 05/01/2015
First Published: 05/01/2015

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Has all that festive indulgence left you with a hangover? We don't just mean the traditional kind, either. Many people will be starting January with a hangover of the financial variety, brought on by overspending and over-reliance on credit cards and overdrafts, so if you're feeling the effects, it's time to take control.

You're not alone

Research from Experian has revealed that suffering from a financial hangover is becoming a widespread phenomenon, with 35% of those surveyed facing such an issue from overspending during Christmas – to the average tune of £207.

That's not the only thing that could lead to a frugal January, either. Many people (around 80%, in fact) were paid early in December, which means they could find stretching their money until the end of the month an even bigger struggle. The research found that 53% of those who were paid earlier would find it difficult to meet their bills by mid-January, and 49% would dip into their savings to cover the shortfall – but 36% will turn to credit.

Don't fear your credit card statement

The final statistic is particularly worrying given that many people will have already racked up a hefty credit card bill over the festive period, so the last thing you want to do is add to it. Try to avoid using credit at this time of year, but if you must, make sure it isn't accruing any additional interest – ideally, use credit cards that charge 0% interest on purchases for a set period of time, as that way you'll be able to spread the cost of your January purchases without paying for it with sky-high interest.

Alternatively, if your credit card statement is already anxiety-inducing, consider transferring the amount to a 0% balance transfer credit card. These can be a financial saviour, as you can find cards that offer introductory terms of up to 35 months – giving you plenty of time to pay off the balance. Just make sure you don't spend on these cards and cut up the original, otherwise you'll be right back where you started.

Stay in control

The key to recovering from your financial hangover – and to ensure it doesn't last well into February and beyond – is to stay in control. Be ruthless with your budget and get rid of absolutely all unnecessary expenditures, and above all, don't continue your bad habits. Stop overspending, try to step away from the credit card and pay attention to where every penny goes, and hopefully you'll be cured in no time.

Julie Doleman, of Experian Consumer, concluded: "Over-spending at Christmas can happen easily, with unexpected costs building up quickly. For those facing January with a financial festive hangover, it's important to understand how your spending decisions over the coming weeks might affect you in the longer term.

"Starting off on the right foot now will help you get the most out of your New Year right from the beginning, allowing you to make progress towards achieving your goal – whether that's saving for a big purchase or life event, or simply getting your finances under control."

What next?

Find the best 0% credit card deals with our best buys

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Top credit cards for Christmas spending

‘Tis (just about) the season to be jolly, but before all that festive fun begins, chances are you’ve got a bit more shopping to do. But, if you’re turning to credit to fund things, you’ll want to use cards that offer 0% interest deals on purchases.

Spooky reality of high balance transfer fees

Credit card debt is scary at any time of year. While most might assume that opting for the longest deal on offer would save them the most, our data shows some of the longest deals can actually work out to be the most expensive.

Reward credit cards that become ‘pointless’

If you regularly use cards to pay at the till, you may have considered opening a reward credit card to earn points every time you spend. However, not all of these cards are as rewarding as they may seem…
 
Close