Citizens Advice offers remedy to holiday “hangover”

Posted 2007-12-3

Citizens Advice is now urging Brits to buy wisely and plan spending as its bureaux prepares for a rush of debt enquiries in 2008.

Climbing interest rates, sluggish wage growth and rising prices are set to make January’s post-Christmas debt hangover a migraine for all.

In January 2007 the most common Citizens Advice enquiries were for credit card debts, arrears on loans, hire purchases, catalogue and mail order debts and overdrafts.

Teresa Perchard, director of policy at Citizens Advice offered, “It is very easy to get carried away at Christmas and spend on the spur of the moment, especially if people leave it until the last minute. But every year, we see a huge increase in debt problems immediately afterwards.”

“With a little forward planning, Christmas panic buying can be avoided. We hope that these top tips will help people take control of their money as Christmas approaches so they do not start the New Year with a debt hangover.”

Citizens Advice, in conjunction with Barclaycard, has offered these remedies to avoiding new debt hammering in the New Year:

A. Plan early for Christmas:

Be realistic and budget. Work out how much you can spend on each person – and stick to it.

B. Do not forget everyday bills:

Remember rent, mortgage, utility bills, food bills, council tax and other existing debts must still be paid. The consequences of missing these bills can be severe.

C. Do not bank on an overdraft:

Do not run up an overdraft without talking to your bank first. Unauthorised overdrafts are an expensive way of borrowing.

D. Avoid shop credit offers:

Avoid extended credit agreements, such as ‘buy now, pay 2009′ unless they really do work out cheaper. Aim to pay outright for goods by cash, cheque, or debit card.

Read the small print of any credit offer to make sure monthly instalments are within your budget before you sign.

“Interest free credit can seem attractive, but if you don’t pay on time, or miss a payment, you could have to pay a lot more,” warned Citizens Advice.

E. Shop around:

Price comparison websites make it easier than ever to find the best prices for goods. With shops expected slash prices this Christmas, shopping around could really cut costs.

F. Think twice about extended warranties. Citizens Advice warns:

“The cost of a repair could be less than the cost of the warranty and remember you have consumer rights to reject goods that are faulty.”

Imagine starting the New Year feeling well and debt-free. A little common sense and a lot of self-control can go a long way in avoiding the gut wrenching, head spinning, nauseated feeling of facing another year of chasing over-extended debt headaches. Lest you eventually find yourself attending some obscure over-spenders meeting for Christmas-o-holics Anonymous, ask yourself, “Is the over-indulgence really worth it?”

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