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The nation is struggling to cope with the added financial pressures of Christmas this year, with millions planning on cutting back in a number of areas. Many risk falling into debt as they reach for a helping hand from overdraft facilities, personal loans and credit cards this Christmas. Funding the festivities in such a way could leave you with a serious debt hangover in the New Year. If you do find yourself strapped for cash and needing to borrow money, we have put together a few handy tips to help you manage your debts. Just Say No to payday loans A staggering 3.5 million people reach for payday loans to cover Christmas costs, as nearly half the country cannot make it to pay day. Despite this, 60% of people regret their decisions to take out payday loans and 48% believe it’s made their financial situation worse. Payday loans offer shockingly high APR interest rates and many people end up just paying the interest back rather than the loan itself. Research from the insolvency body R3 found that one in six people are only able to pay off the interest on their debts, making no inroads into the actual debt itself. Credit Cards dampen Christmas cheer Credit cards can be a great source of extra finance when you need it, providing that you can afford to pay it off at the end of each month. If you feel that you would not be able to make repayments on your credit cards it would be wise not to use them. Don’t be persuaded by attractive offers for store cards either as they tend to have alarmingly high interest rates, as well as hidden fees and charges. Taking on more debt to pay off your existing debts may cause your financial situation to deteriorate further. It might be advisable to seek debt advice and find a suitable debt management solution. Compare debt management solutions with Money Expert.
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