10th November 2015
An eye-watering 14m Britons will put their Christmas spending on a credit card this year, according to new research from uSwitch.com.
The comparison site’s analysis found that more than a third, at 34%, will put presents on plastic and 21% will use their credit card to pay for the turkey.
On average, families plan to spend £600 on Christmas, with 10% splashing out more than £1,000.
But to cover the cost, 29% will be forced to borrow money. This is at a time when nine million people are still shouldering debt from last Christmas and consumer credit has soared to its highest level since 2006 with consumers racking up £62.7bn on credit cards.
Relying on credit cards to fund the festive season could lead to a New Year debt hangover so as such, it’s never been more important to use the right card.
Yet just 26% of those using plastic this season will use a cashback credit card, meaning the majority could miss out on valuable perks. Furthermore, the study showed that just 15% will use a 0% purchase card– which could help give them up to 27 months of breathing space on their debts.
Over a third of Christmas shoppers, at 35%, will rely on a standard card, without any special offers or features.
Tashema Jackson, money expert at uSwitch.com, said: “The quest for the perfect Christmas could plunge millions of families into debt and, for many, they will be paying the price well into 2016. Consumers are under enormous amounts of pressure to spend at this time of year, despite many knowing they can’t afford it. Some are even still suffering a financial hangover from last year.
“However, as well as cutting back where possible during the festive season, there are things consumers can do to help manage their money better. Savvy shoppers who can clear their balance in full each month can take advantage of a cashback credit card and make a little back with every purchase.”
Jackson highlighted that those unable to clear their balance can benefit from some breathing space by putting their presents on one of the many 0% purchase cards on the market. These offer up to 27 months of spending interest-free.
“For those still paying off Christmas 2014, balance transfer cards are offering the longest ever interest-free periods, which could provide some welcome relief with the financial juggling,” adds Jackson.