10 top tips to avoid the Christmas debt hangover

Christmas is a time of giving but you don’t want to give yourself a headache in the new year with debts and bills you can’t afford

It’s easy to overspend – there are tempting offers and pressures to buy - but you must decide how much you can afford before you start spending. Here are some top tips for avoiding getting into debt at Christmas:

Stick to a plan

Work out how much you’re going to spend on each person and stick to it. Don’t be tempted by seemingly ‘great deals’ – if you weren’t going to spend the money before you saw the deal, don’t spend it when you do.

Avoid running up your overdraft 

If you need more money than you have in your account, don’t run up an overdraft without talking to your bank first or they will charge you for it. There are other options which may be cheaper, like taking out a small loan from a credit union. See more information here

Pay upfront where you can

If you can afford to pay for your gifts straightaway by cash, cheque, or debit card do so. Don’t take out credit agreements unless they really do work out cheaper. You might think you’re saving money at the time you buy, but it’s no use if you end up paying more in the long run.

Read the small print

If you’re taking out credit to pay for gifts, make sure you check for hidden costs. Always work out the total amount you’d need to pay back and make sure you can afford the monthly repayments before you sign anything. Interest-free credit can be tempting, but if you don’t pay on time, or miss a payment, you could end up paying a whole lot more.

Compare credit deals

If you’re going to use a credit card, shop around and compare terms. Some cards charge high interest rates, but give you interest-free periods or discounts. Make sure you work out what’s the right card for you. Moneysavingexpert.com has some useful info on this, so have a look at the website before you decide on a card here.

Stay on top of payments

If you do borrow money, make sure you budget for all the costs, put the payment dates in your diary and set a reminder on your phone, so you can’t miss them. Pay on time, even if it’s only the minimum payment, or you’ll end up having to pay much more.