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relying on your plastic can easily add 10% or more to your festive shopping bill
Published: 20/10/2009 |
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With a little more than nine weeks left until December 25th, many people will have just two or possibly three paydays to come before Christmas. If they’ve not been squirreling money away during the last few months, there’s a strong possibility that consumers will be tempted to reach for their plastic to help cover their Christmas shopping. Whilst there are still some long term 0% purchase credit cards still available, lenders have really tightened up their credit scoring criteria and unless you have a blemish free credit record these interest free deals may not be available to you. If you’re comfortable that your credit record is in A1 condition, then you’ll need to apply now as it’ll probably be a couple of weeks between applying and actually having the card in your hand.
If you’re not fortunate enough to bag a 0% card, then you need to be aware how much extra your Christmas celebrations may end up costing you if you use your existing credit card. The table below shows how much extra you’ll pay on £1000 of shopping even if you repay at £100 per month.
Whilst these sums may not seem very much in isolation, it’s quite easy for consumers to add an extra 10% or more to their Christmas shopping bill. If the shop assistant added 10% onto the price of all your purchases at the till, I’m sure you may think twice about buying them, however because the interest spread over a longer period, you don’t realise how much over the top you’ve actually paid. Borrowing for Christmas can cost an awful lot more for some people who are unable to borrow from mainstream lenders. Provident Personal Credit is currently advertising a loan example of £300 repayable at £10.50 per week for 52 weeks. Total repayable is £546 – that means interest of £246 and a rate of 272.2% To get yourself in a position where you don’t need to pay interest on your Christmas shopping for 2010, open a separate savings account and set up a monthly standing order to start funding it now. Savings interest rates aren’t brilliant at the moment, but at least the bank will be paying you rather than the other way round. The most important habit to get into is to start putting some cash away on a regular basis from now and then you’ll be in a far better financial position come December 2010. ENDS
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