As Christmas time approaches more and more people will be looking to manage their Christmas debt and in particular looking at ways to be reduce their credit card bills. It is estimated that the average UK household will spend in excess of £1000 over the festive period on presents for family, friends and acquaintances. However, many people will spend significantly more than the £1000 average and come the New Year they will then need to re-visit and reorganise their finances. How can you manage your debt after Christmas?
If you’re looking to put a significant amount of your Christmas spending on to your credit card, with the idea of paying it back over a prolonged period, then you need to take advantage of the various 0% interest rate offers available. Despite the fact that we are in one of the most difficult economic periods in living history there are a number of companies offering 0% interest on credit cards for periods of up to 12 months and in some cases beyond.
While 0% interest rate credit cards should not be seen as a reason to spend money they are very much a useful tool for those looking to control their debt and control their repayment plans. If you have a 0% interest rate credit card then in simple terms the debt which you transfer onto the card will attract no interest. However, you also need to be very aware that if you spend any more money on your credit card and do not pay this back in time then your additional spending will attract the “traditional” interest rate. This is something which many people seem to ignore and it can cost you dearly in the long run!
If you’re looking to spend a significant amount of money over the Christmas period then you do need to look at your finances as soon as possible. You need to put together a financial plan and a financial package to get you over the Christmas and New Year period and then look towards repaying any debts you may have taken on board. The first few months after the festive period are by far and away the most active in the trust deed market because this is a time when more people than ever before will overextend their finances.
While many people may well qualify for a trust deed, which can in due course take off much of the financial pressure, do not take this for granted. Trust deeds are not a reason to spend money, they are a reason and a means of reducing the pressure on people who have overextend themselves in the past or perhaps been the victim of circumstances. Just because you have a certain level of debt does not automatically mean that you will qualify for a trust deed so if you are planning to spend as much as possible before Christmas and then basically make yourself bankrupt in the New Year, think again!
Despite the best laid plans the chances are that many of us will overextend our finances at Christmas and may well, in the current economic climate, still be paying back our debts this time next year. There are a number of financial tools out there to reduce the pressure on your finances but in simple terms you should not overextend yourself and then expect to be bailed out.
