If you haven't started your Christmas shopping yet, what are you waiting for?!
There's a mere 4 weeks to go until the big day, and unless you want to panic buy it's high time you started working your way down that Christmas list. But, with the average adult expecting to spend around £340.80 there could be a chance you're considering the best ways to pay for your Christmas shopping, and here at Moneyfacts we've got a few options for you.
Hopefully you'll have planned ahead and will have a savings account you can dip into for just this kind of occasion. Of course, you don't want to access your savings unnecessarily – unless you've got an instant access account the penalties could be severe, and ideally you'll want to leave it for emergencies anyway – but if you've specifically budgeted to use a particular savings account for Christmas then now's the time to crack into your pot. It certainly beats trying to cover it with your November paycheque!
If managed effectively, the right kind of credit card can be a great option for those looking to spread the cost of Christmas. Cards that offer 0% interest on purchases can be ideal as you won't be adding interest to your bill, and if you pay the balance off by the end of the interest-free period you haven't accumulated any additional debt.
Alternatively, look for cashback credit cards that can give you rewards as you shop, then consider putting the balance onto a 0% balance transfer card after Christmas – these interest free-periods can be very generous, in some cases giving you as much as two years or more to pay off the balance. You get the cashback and the time to pay it off without interest which could be a great combination, but just make sure to pay it all off before the interest-free period ends (and bear in mind that failing to meet minimum repayments could result in interest being applied).
If you've got the ability to pay small monthly payments but can't fund your Christmas shopping in one lump sum, taking out a small short-term loan could be an option. These loans can provide a clear exit route as you won't be tempted to just pay the minimum payment (as you could with credit cards) which means you can be confident you'll be completely free of debt by the end of the term, and as long as you keep it realistic it could be a viable option.
For the ultra-sensible, the best way to go is always to plan ahead and save up in advance. Trying to use one paycheque to fund everything can be nearly impossible, and although credit can be affordable when managed properly it isn't always ideal for every situation. It's often a far better idea to make regular savings throughout the year so you know you've got a tidy sum waiting for you, especially with interest added in, and as luck would have it there are several regular savings accounts currently available (some offering as much as 4%) that will leave you with a nice savings pot this time next year.
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Cracking Christmas Credit Cards
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