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11.6m still paying off last Christmas

11.6m still paying off last Christmas

Category: Money
14/11/2016

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 It is now over 6 months old so the content may be out of date.

Christmas is fast approaching, and with it comes the inevitable concern of how you're going to pay for the whole thing. While some can be smug at the thought they've planned ahead and have a nice little festive savings fund waiting for them, others will be forced to turn to credit - and it seems that a particularly unfortunate few are even still battling with payments from last Christmas...

Extended hangover

Research on behalf of Debt Advisory Centre has found that 23% of surveyed Brits are still struggling with last Christmas' financial hangover, with the average outstanding debt standing at £517. According to their calculations, this means that as many as 11.6m people are still paying for last year's festivities, with an estimated £6bn still outstanding.

Overall, 46% of respondents said they borrowed money to help pay for last Christmas, and unfortunately, some people are finding it particularly tough to repay, with one in five of those who still owe money having more than £1,000 left to pay off. It seems that some could be a bit more organised this year, with just 13% saying that they'll borrow money to pay for Christmas, but whether that resolve will stick remains to be seen.

"For the millions with little or no savings and who are just making ends meet month to month, there is little choice but to borrow if they want to buy presents and other Christmas treats," commented Melanie Taylor of Debt Advisory Centre.

"Many of these people have no slack in their budget, so finding money to make the repayments in the New Year will be a struggle. It is no surprise that January and February is the busiest time for many debt advice providers."

Don't get caught in the trap

It can't be denied that paying for Christmas can be a challenge, particularly for those who have no wiggle room in their budget. It's little wonder that many feel that there's no alternative but to head for credit, but if you really have no other choice, the key is to stay sensible.

Set a budget to reduce the chances of overspending, and perhaps let loved ones know that you may have to rein in the spending a bit this year. Do your research to find the best prices for those must-have gifts and use vouchers or discount codes wherever possible, and if you're spending on a credit card, do it the credit savvy way.

That means getting a card which charges 0% interest for a set period, giving you plenty of time to pay off the balance without needing to worry about interest adding to the bill. Hopefully you won't still be repaying it in a year's time, but if you are, at least you can be confident that you're spreading the cost in a manageable way.

If it's all a bit too late and you're already starting to panic, fear not - speak to your lenders if you can't manage the repayments, get independent advice from a debt charity, and read our guide on dealing with debt so you can start the New Year on a better financial footing.

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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