Did you have a really super Christmas? I do so hope so! For many thousands however there is a penalty to pay in the form of your January credit card statements. Are you one of those who finds out too late that you haven't the wherewithal to pay the frightful balance showing on the statement and therefore you have to elect to pay the minimum figure required instead and be charged the interest rate which will start showing next month and will normally be calculated at a horrendous rate normally something approaching 20%.
Christmas has proved to be the start along the slippery slope of getting into debt for so many Our own credit card statement happens to show one of the largest totals ever experienced by ourselves but that is because it includes not only Christmas but also our removal costs to Hail Weston where we moved only eight days before Christmas -much to the delight of my wife Joyce who as usual was entertaining the enlarged family- and the purchase of 50 tickets for the wonderful Prom Praise concert in The Royal Albert Hall for which hopefully we will be reimbursed by those going. We did know it would be large so monies had been set aside in advance for this expenditure.
How can you ensure that you don't land yourself in debt over Christmas? If you are prudent you will produce a budget and set aside a sum each month into a savings account from which you can withdraw at Christmas. You will discipline yourself not to spend anymore than has been allocated in that account. You will have calculated your likely expenses for presents, food drink and entertaining for Christmas and divide this figure by 10 to allow for 2 months when you might not be able to afford this payment e.g. the month you go on holiday However maybe this recent Christmas you have not been prudent and you are now in a hole! Oh dear!!
What can be done? If you find you have a balance you can't pay on those credit cards have you looked at the possibility of changing these to cards where you can arrange to pay off your existing balance and which offer you a much lower rate of interest? Capital One Bank and Egg for example have been offering 0% interest for six months.
If you have equity in your house and there is no penalty in force for changing your mortgage have you considered borrowing- at the lowest rate available in most people's lifetime- additional money and paying off all your debts this way Beware however of the charges of doing this Get free advice {at least the first half hour anyway} from an Independent Financial Advisor . How about changing to a flexible mortgage where in certain instances you can obtain two months when you don't have to pay your mortgage premium one of these you could arrange to be the Christmas month.
Throughout the country many people are going ahead and borrowing against the increase value of their house In fact this is going on at such a rate that borrowing this month has hit an all time high which for me is starting to ring alarm bells Sir Eddie George is also becoming a little concerned and has now started to hint that interest rates could start creeping up if spending and borrowing continues at the present rate. So be careful remember what happened at the end of the eighties and early ninties the period of negative equity repossessions and numerous bankruptcies Try and keep within your budget and don't be forced to keep up with the Jones whose income might be considerably more than yours So please beware!
We would appreciate your ideas or comments so if you have any please write to us or send us an email. Perhaps you have a question or a problem relating to this or any other financial matter you would like to raise with us. Please don't hesitate to contact us and we will eneavour to reply as soon as possible
Remember our Lord said "Owe no man anything" and there are less than eleven months to Christmas