Christmas debt threat noted

Christmas is a time when many people can get into debt through overspending and borrowing to pay for the festivities – but this is avoidable, Credit Action has said.

Associate director of the financial charity Joanna Parsley advised: “Although Christmas is only a month away, at Credit Action we would urge everyone to rethink Christmas,” noting 47 per cent of the UK population look set to start next year paying off yuletide debts.

She suggested there are many ways in which the threat of debt can be alleviated, including cutting costs and finding many ways to make general savings to household expenditure.

And if people do decide to borrow money, it should be on a card with a low rate, with Ms Parsley emphasising it is important to “pay down the debt as soon as possible.”

She noted while the average household now owes less than in November 2007, the economic troubles of the last few years have put pressure on the finances of many people, observing: “The financial crisis has put a strain on our personal finances and caused all of us to rethink the way we use money.”

Ms Parsley commented after a survey by Moneysupermarket.com this week suggested 3.8 million people could be pushed into debt though their Christmas spending.

Of these, 69 per cent were planning to use credit card to fund their outlay, which may add emphasis to the advice given by Ms Parsley to pay this off quickly.

The survey also showed a third of those who borrowed money to pay for Christmas last year have yet to pay it all off.