Christmas credit and the Grinch that stole your limit

Posted by Paul Anderson Riley in Personal Finance on 13 December 2016 - Paul is a Credit Analyst at checkmyfile

The truth is that most of us don’t want to consult our finances at this time of year and would rather wait until after the storm has weathered (or Christmas is over). As we fill our mouths with food and drink and give gifts, we often incur high costs at this time of year.

As the bills rack up some of us start to use our credit facilities or look for other ways to finance ‘the best Christmas ever’. Although time is a rare resource at this time of year, perhaps some forward planning and continuous evaluation can help us to work out where all that money is going over the festive period.

Planning long term is never a bad idea, perhaps in January you can start to plan for next Christmas with the cost of this Christmas in mind. Setting aside a little bit of money each month can result in having a nice amount of savings for the Christmas period. If in January you have extra money leftover, you could even treat yourself to a January pick-me-up.

If you do plan on using credit or a loan to cover the cost of Christmas keep in mind how you will pay this money back. It is also recommended that you look around for the best credit options available, many lenders will provide different offers at this time of year to encourage you to apply for their products. Checking your credit report before applying for these different agreements will help you to see what information is currently held about you and what credit you currently have access to on existing agreements.

Managing your credit agreements at this busy and expensive time of year is important, as mismanagement could result in negative markers on your file. When committing to purchases, keep in mind what would happen if you are unable to make these payments in the future. As much as we want to give the best gifts we all need to be realistic about what is affordable.

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