In the run up to Christmas – and the sales following – many Brits spent a substantial amount on credit cards. This has, however, had a negative effect…
In the run up to Christmas – and the sales following – many Brits spent a substantial amount on credit cards. This has, however, had a negative effect on many, with 20 per cent of adults now concerned that they are in a worse financial position than this time last year, according to recent research conducted by Confused.com.
One in five (21 per cent) Brits confessed that they had spent much more than they intended in the run up to Christmas. This has resulted in seven per cent now admitting to struggling with debt in 2016.
However, it looks like people are trying to tackle this in January rather than leaving it for the year ahead. A surge in the number of credit card balance transfers is expected today (January 12th), as people attempt to improve their financial stability. In addition, credit card transfer applications are also expected to spike.
Unfortunately, despite efforts to get back on an even financial footing, many people continue to find themselves in the same situation year-on-year. A massive 28 per cent admit that they spend more on credit cards in December than at any other time of year.
Many people admit that they get caught up in the excitement of massive sales such as Black Friday and Cyber Monday and don't think about the consequences of their excessive spending until afterwards. 2015 was no exception to this, with a record £3 billion being spent online across the two days.
Following such events, 14 per cent are now left concerned about their levels of personal debt. In fact, some are taking extreme measures to now save money with 27 per cent cutting down on eating out and 23 per cent reducing their leisure activities. In addition, 13 per cent are limiting their food shopping while ten per cent are even cutting down the amount of heating that they use.
Even by taking these steps, eight per cent still believe it will take them between six months and a year to pay off their debt, while seven per cent expect it to take over a year.
Surprisingly people still seem to have a lack of awareness when it comes to their finances. A large amount of credit card holders (68 per cent) admit that they haven't transferred credit card balances onto zero per cent interest cards even though this could have saved them money on repayments.
12 per cent haven't done this because they're concerned that it will be too complicated, while seven per cent were either unaware that it was an option or didn't know how to go about it.
Nerys Lewis, head of credit cards at Confused.com says: "Christmas is undoubtedly a time of generosity and giving and many people will rely on credit cards to get themselves through the expensive festivities. If used wisely, credit cards could be a great way of spreading the cost of Christmas over a number of months, particularly with a zero per cent introductory deal that will give people a bit of time to pay off their purchases."