Monday, November 30, 2009
Category:
Consolidation
With Christmas just around the corner, moneysupermarket.com has offered ‘ten top tips’ for those who are looking to reduce spending over the festive season.
- Consumers should refrain from taking out store cards, despite incentives such as immediate discounts or money back, as interest rates are not likely to be competitive.
- Supermarket credit cards, which are linked to loyalty schemes, are competitive and can offer good value.
- If savings are not available and it is necessary to borrow the funds required, consumers could investigate credit cards with zero percent interest on purchases. However, consumers should be sure that the sum borrowed is appropriate to their individual circumstances and that it can be repaid within the introductory period.
- By taking out a cashback credit card at the beginning of the year, consumers could save up for next Christmas with the money that is received from each purchase made with it.
- Before taking out a loan during the run up to Christmas, consumers should shop around for the best deal that is most suitable for their circumstances.
- Consumers should be aware of savings clubs that lock cash away throughout the year to provide shopping vouchers at Christmas. When embarking upon such a scheme, consumers are forfeiting interest payments and could even be charged high prices for the goods that they purchase with their vouchers.
- Consumers should not make impulse purchases; instead they should do some online research to bag a bargain.
- The internet can also be used to find and download vouchers and discount codes, which could prove beneficial when Christmas shopping.
- Consumers should work out what they need to buy and what they can afford to buy, in order to set a budget. Sticking to this budget should then remove the possibility of getting carried away and starting the New Year in the red.
- Individuals who are borrowing money to finance this Christmas should set up a regular savers account at the start of 2010 in preparation for next Christmas.
Head of banking at moneysupermarket.com, Kevin Mountford, commented: "Christmas can be a difficult time of year financially and the current economic climate is not making things any easier. Although there are a few options to spread the financial load at Christmas, the ideal time to start preparing is January. Preparation is the key to a hassle free festive season and savvy consumers with savings will be able to start the New Year without the burden of a Christmas – debt hanging over them."
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Homeowners who have taken out several credit cards over the years, and now face an array of repayments each month, could consider tying these up with a
secured loan. One of many finance options available, a secured loan for debt consolidation could leave the borrower with just one monthly repayment. Furthermore, this single monthly repayment could even be lower than existing outgoings – thus freeing up extra money each month, which could potentially be entered into a savings account. However, when taking out a debt consolidation loan, it must be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.
