How to avoid racking up credit card charges this Christmas
While 55% of Brits feel confident they will stay within budget this Christmas, the research shows eight in 10 believe presents for family and friends might tip them over budget.
The data shows a quarter of Brits are expecting to spend more this year, by an average of £151. Brits will put nearly £300 on their credit cards, equivalent to a third of their total Christmas spending.
Seaneen James, money expert at MoneySuperMarket, said: “There’s no doubt Christmas is an expensive time of year but there are easy ways to keep costs down to avoid putting yourself in unnecessary debt.
“With the average amount of credit card debt standing at over two thousand pounds (£2,172), it’s likely many won’t have paid it off by this time next year. Shopping around for the right credit card deals can help make substantial savings, meaning you could end next year a little more comfortably.”
MoneySuperMarket gives shoppers the following top tips to avoid credit card charges:
- Always pay off your balance – you should always aim to pay off the balance of your credit card in full each month to avoid paying interest.
- If you can’t pay in full, at least pay the minimum – if you don’t, you’ll get charged a late payment fee, usually £12, and get a negative mark on your credit file. The best way to avoid this is by setting up a direct debit to ensure your credit card payments are always made on time.
- Don’t use your credit card to withdraw cash – we’re well accustomed to withdrawing cash from an ATM with our debit cards and not having to pay a fee, but don’t get caught out by assuming the same rules apply to your credit card, as you will usually be hit with a charge of around 3% of the amount you take out (often with a minimum £3 charge). On top of this, you’ll also be charged interest, typically at an annual percentage rate (APR) of between 20 – 30% depending on the card – and this will be levied from the moment you make the withdrawal.
- Don’t go over your credit limit – if you do, you’ll get charged. If you’ve always managed to keep within the limit and only exceed it accidentally by a few pounds, contact your credit card provider as soon as possible and ask it to waive the fee.