As the nights get longer, many of us will be starting to think about Christmas, which can often be an expensive time for households. Along with buying Christmas gifts, food and decorations, many will also need to factor in travelling costs to visit relatives, festive days out with family and friends, and Christmas parties.
After more than 18 months of economic uncertainty, as well as rising inflation and household bills, many consumers will be feeling the financial squeeze and may be considering how they will pay for this year’s festivities.
To help consumers enjoy Christmas, we’ve highlighted some financial options that will help pay for or spread the cost of the festive season.
Organised consumers may have opened a 12-month regular savings account last year enabling them to deposit a small amount each month that can be used to help pay for Christmas. Saving ahead for next Christmas is a great way to spread the cost throughout the year without getting into debt. Opening a 12 month regular savings account now will ensure it matures in time for the start of the festive shopping period. When the account matures savers may want to transfer the funds to an easy access savings account that will enable them to withdraw the money instantly, although before transferring savings consumers should look to see if there are any withdrawal restrictions on the new account. As well as withdrawing the money, consumers should consider opening a regular savings account now to ensure it will mature at the right time for next year’s festive season. To find out more about regular savings accounts and compare deals, visit our regular savings account comparison chart.
For those who didn’t set up a Christmas savings fund, an option could be to use a 0% purchase credit card to help spread the cost of Christmas. Although it is usually not advisable to get into debt to pay for Christmas, a 0% purchase credit card can be a useful way to supplement the cost of Christmas as these cards have an interest-free period in which the balance can be repaid. On some of the most competitive 0% purchase credit card deals the interest-free period can last up to 22 months; however, when using credit cards it is important to keep in mind it can be easy to fall further into debt, especially if the full amount is not being repaid each month. Although a 0% purchase credit card can be a useful way to help towards the cost of Christmas consumers should aim to repay the amount borrowed as quickly as they are able and to only use the card to make necessary purchases.
To compare deals and find the best interest-free purchase credit card visit our 0% purchase credit card chart.
In the lead-up to Christmas it may be worthwhile looking at cashback switching offers as this can be an easy way to boost incomes during the festive season. Some banks will offer customers a cashback incentive if they switch their bank account within the bank’s terms and conditions. For example, Lloyds Bank currently offers a £100 switching incentive to customers who switch to its Club Lloyds or Platinum – Club Lloyds accounts using the Current Account Switch Service (CASS). Alternatively, consumers can consider opening a bank account that offers cashback on purchases to help earn money while doing their Christmas shopping. To see which accounts offer cashback on purchases visit our current account comparison chart.
Here are some things to avoid when paying for Christmas:
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