Christmas may be the most wonderful time of the year, but it can also be the most expensive. With presents, food, drink and other festive necessities the bill can soon add up, and if you haven't saved in advance it can put a huge strain on family finances. That's why a lot of people turn to credit to fund their festive spend, but if you go about it the right way it needn't become unaffordable.
Opting for a balance transfer credit card can be a great option. If you've already made your purchases you can transfer the amount to a credit card that charges 0% for a set period of time, ensuring interest doesn't accrue whilst giving you time to pay it off. Alternatively, look for cards that offer 0% interest on purchases – again, this will usually be for a set period of time, which means you can put your festive purchases on the card and pay it off before the interest-free period runs out.
But, we all have good intentions. If you've found that you haven't paid off the balance by the time the interest-free period ends, you could always take out a short-term loan instead. Opting for a 12-month fixed loan will ensure you can pay off the full amount within the year, giving you a clear exit strategy to ensure you can get out of debt. And, if you need to do it again next year you'll already know you can afford the repayments, so it won't put a strain on your monthly budget.
It could also be a good opportunity to look at whether your bank account is performing as well as it could be. The industry is becoming increasingly competitive and a lot of banks are offering generous cashback incentives to their credit and debit cardholders, whilst some even offer cash incentives for switching – a welcome boost to the Christmas budget.
Or, if you want to start planning ahead for next year, setting up a savings account could be the way to go. ISAs allow you to make the most of your tax-free allowance while regular savings accounts mean you can add to your Christmas fund throughout the year, or if you're willing to lock up a lump sum a one-year fixed bond could be ideal.
Whether you're planning ahead or preparing to spread the cost of Christmas debt, there are ways you can make the festive period more affordable.
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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 Any products featured may be withdrawn by their provider or changed at any time.
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