Citizens Advice Scotland has published a guide on how to avoid Christmas on credit.
A charity has published a guide to help people avoid debt at Christmas as it warns against overspending on Black Friday.
Citizens Advice Scotland (CAS) is urging customers to be “savvy shoppers” by following its 10 tips to avoid a Christmas on credit.
Suggestions include making a list of what you need to buy – and what you can afford – and then sticking to it.
Shoppers are also cautioned against “buy now, pay later” offers and urged to read the small print on any credit agreements.
Myles Fitt, CAS financial health spokesperson, said: “As shoppers across Scotland get ready for the busiest pre-Christmas spending days, it’s important to remind them that over-spending now could mean they could fall into debt which may become un-manageable in the New Year.
“The Citizens Advice network in Scotland helps hundreds of thousands of people every year, with debt being one of the most common issues we deal with. And every year, so many of the debt clients we see tell us their debt problem started when they spent more than they could afford on Black Friday or Cyber Monday or in the run-up to Christmas.
“Of course we want everyone to have a great Christmas, but we also want you and your family to avoid the misery of a debt crisis in 2020. The way to do that is to be a savvy shopper now, and follow our top 10 tips on how to avoid over-spending.
“Remember – Christmas on credit could mean a debt hangover in the New Year.”
The 10 Tips are:
1. Make a plan and stick to it.
The worst way to do Christmas shopping is blindly pushing everything onto your credit card. Before you start shopping, sit down and work out what you actually need, and what you can afford - and then stick to the plan.
2. Be wary about “Buy now, pay later” offers.
Are you sure you’ll have the money later? Remember - penalties for late payment can be huge.
3. Read the small print of any credit agreement closely.
If anything is unclear, ask before you sign. And if you’re uncertain, don’t buy the item – go home and think about it. You can always come back next day to buy if you want to.
4. Beware of store cards.
They’re often a more expensive form of credit than credit cards, many charging interest rates of around 30% or more.
5. Don’t run up a bank overdraft.
Bank overdraft fees are high, and are about to get higher in the New Year due to new banking rules.
6. Remember the New Year utility bills.
Gas and electricity bills often arrive in January/February, just when you’re feeling the pinch after the Christmas spend. And they’ll be higher than usual at this time of year. Allow for these in your budgeting.
7. Don’t forget this month’s bills either!
It’s a big mistake to put off payments such as mortgage/rent/council tax etc. These should always come first, ahead of any Christmas spending.
8. Have you maximised your income?
There may be benefits available to you that you are not claiming, especially if you’re a lone parent, on a low income, unemployed, or a pensioner. The CAB network runs the Scottish government-funded Money Talk Team. Call 0800 085 7145 or by visiting their local CAB.
9. If you do think you’ve over-spent, get help.
If you’ve gone into debt, don’t ignore the problem or hope it will go away. It won’t! Again your local CAB can give you free, confidential and independent advice on how to manage your debt.
10. Start a Christmas account for next year.
If you can put aside a little bit of money every month, however small, that means you’ll have a good start on your Christmas spending budget this time next year.
