Christmas Savings Guide

If Father Christmas fails to bring you that winning lottery ticket you asked for, all is not lost. If your finances aren't looking too festive this season - moneynet can help you out with a few money-saving ideas:

1. If you have a credit card already and carry any debt over from month to month you should consider transferring the balance to a card that offers 0% on balance transfers. It's also likely that you will spend on your credit card over the Christmas period so you should look for a new card that also offers 0% on purchases. There are a few deals around that will offer you 0% on both so these are well worth considering, take a look at our best buy section:

2. Remember that if you are buying on a credit card you should always repay the debt before you start incurring interest. The credit card providers are prepared to offer you 0% as most people remain with the card after the introductory period and they then start charging you interest. Don't fall into that trap - make sure that you either repay the debt in time or alternatively transfer to another 0% card at the end of the interest free period. Make a diary note to remind you a month or so before the interest free period expires.

3. If you need longer-term finance consider a personal loan. There are some excellent deals available at the present time with rates below 6%. If you are taking out a personal loan try and choose one that has no early redemption penalties. That way if you pay it off early you won't be penalised. Most product providers will also try to talk you into taking out payment protection insurance to cover your repayments in case you are unable to work. This is often a good idea but be careful. Many of these policies are a rip-off with exorbitant premiums. By all means ask the provider for a quote but get them to quote with and without payment protection so you can see exactly what the payment protection is costing you.

Remember, it is never compulsory to take the payment protection insurance from the loan provider although they may intimate otherwise. If you need payment protection insurance shop around for a stand-alone policy and compare the cost with what the provider is offering you. Moneynet's stand alone policy is a market leading product and starts from £7.50 per £100 of monthly cover. Compare that with what your provider is offering.

Finally, make sure that any policy you are taking out is suitable for your needs and that you are eligible to claim under it. For example, if your employment is seasonal or you work on short-term contracts you may be excluded from claiming. Equally, if you are self-employed there could be restriction so make sure you check the small print.

4. If you have a mortgage, now could be a good time to consider finding a better deal. It is surprising how much you can save by re-mortgaging to another lender or arranging a new deal with your current lender. Use the moneynet re-mortgage calculator to see if you can save money in this way and speak to your existing lender to see if they can offer you better terms. In many cases it is possible to re-arrange your mortgage, borrow some additional money and at the same time and still end up with a lower monthly repayment. However, remember that a mortgage is long term and you may be paying back the interest for many years to come. A few thousand borrowed now may seem inexpensive but stretched out over the next 20 years it could cost you dearly.

5. Are you making the most of your savings? With interest rates as low as they are and looking likely to be further reduced it's important that you make every penny count. Many saving accounts offer what can only be described as meagre rates on interest. This is particularly true if you have had your money in the same place for a period of time. Banks and Building Societies have a habit of offering attractive rates to attract new customers whilst allowing their existing customers to suffer in poorly paying accounts.

Don't let them abuse you in this way. Keep a regular watch on the rates you are being paid and be prepared to move your money around on a regular basis. To compare savings accounts use the Moneynet comparison service.

6. Store Cards - Our pet hate! Beware of Store Cards and treat with caution. Most of these cards charge an extortionate rate of interest, some over 30%! It is easy to be tempted when the stores offer you such good offers to apply for a card. However, the 10 or 20% they offer you off goods will soon be paid for in interest that the company will earn from you if you don't repay the debt in full. Our advice is this - only take out a store card if you are sure that you are disciplined enough to repay the debt immediately and then cut up the card as soon as you receive it. If you are then you could get some good discounts but if you're not you will fall prey to some of the more greedy providers and end up paying dearly.

7. If you're looking for ways to save money then check your utility bills. By switching supplier for your gas, electricity or even telephone you could save money to help with your Christmas expenditure. Check our utilities comparison service, see how much you can save and switch online.

Compare Utility prices

8. Try shopping online for your Christmas presents. Sites such as www.Kelkoo.co.uk and www.pricerunner.co.uk enable you to compare prices from various suppliers and find the cheapest. Even if you prefer to buy on the High Street it can still be worth going armed with prices from these sites as many High Street shops will discount if they know they are beaten on price.

9. If you've a number of outstanding debts such as loans, credit cards and store cards it might be worth merging all of your debts into a single debt consolidation loan with more manageable repayments. However, if you do this it is usually sensible to cut up your existing credit cards and store cards once you have repaid the debt so that you are not tempted to spend on them again.

However, be careful if you are going down this route and make sure that you don't get out of your depth. If you feel things are getting out of control then take some advice form one of the organisations set up to help. Organisations such as the National Debtline www.nationaldebtline.co.uk or the Foundation for Credit Counselling www.cccs.co.uk are both charities that can help you with free advice.

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