Choose wisely which card you use to pay for Christmas

December 21, 2006

In this final run up to Christmas, it can be very tempting to take up stores’ cards’ discounts and special offers and promotions. Just make yourself aware of all rates and fees involved so you are not out of pocket.

A&L Personal Loans have conducted research showing that 23% of people have used store cards as one way of paying for all their festive expenditure. Over half this number have chosen store cards for the simple reason they were offered them at the till at point of purchase. Some of the store cards charge a high interest rate (some have been reported to be close to 30% APR). These certainly would be unsuitable for those not intending to clear monthly balances. In the end their Christmas costs could soar and they would be well advised to find an alternative card.

There has been an OFT investigation into the rates stores impose on their card holders, but nothing has been done to reduce them.

Research indicates that 23% of consumers with some kind of debt are willing to consider one loan at a much cheaper rate in an attempt to consolidate their debts.

Nearly one in three of this group (31%) who would consider debt consolidation acknowledge that accruing all debts into just one loan can reduce their monthly payments. Another 9% believe this is the best way forward to try and eliminate their debts, yet 5% do not view debt consolidation as a particularly beneficial option and raise serious doubts about it.

Furthermore for those interested in consolidating debts, one in five have a New Year resolution to pay off debts in 2007 while 16% welcome the set monthly payments required by a loan to enable them to tackle more of the actual debt amount and not just the interest payments.

Finally there are 10% who feel down at having store and credit card debts and admit struggling to erase them.