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Christmas No’s – How not to pay for Christmas


How do you pay for Christmas?

Ideally the best way to pay for Christmas is to save up over the course of a year. We do this to pay for our summer holidays and other annual treats, but for some reason every year more and more people are paying for Christmas with credit.
Is this you?
If it is then it’s vital you shop around and do thorough research before making a purchase, otherwise Christmas 2014 will end up costing you a fortune in interest and charges.
How not to pay for Christmas this year:

1.Payday loans

Payday loans have featured very heavily in the media throughout 2014, receiving thundering criticism from regulators, the Government and the Church of England. The presence of payday loan companies has grown rapidly over the past five years, lending small amounts of money (usually under the value of £500 at a high rate of interest), to many British families.
According to the Money Advice service 1.2 million payday loans were used in 2013 to pay for Christmas, which is a terrifying amount.
The simplicity of payday loans makes them an easy option for those looking for easy access to cash. You can apply for the payday loan online and within minutes the cash will be in your bank.
Research shows that one third of borrowers who take out a payday loan can’t actually repay them, which is a sad fact. If you are considering a payday loan to pay for Christmas this year, we suggest speaking to friends or family first, and find out if they are in a position to help you.

2.Unauthorised overdraft

An unauthorised overdraft can work out to be just as expensive as a payday loan. If you slip into the red with your Christmas spending, then expect to pay some hefty charges. On average you will be charged £30 for every bounced transaction or £10 for everyday you use your unauthorised overdraft.

3.Store cards

During the pre-Christmas rush, store cards can seem like a suitable alternative for paying for Christmas, especially as many offer discounts if you sign up on the day. Store cards can be reliably more expensive than a high street credit card, with typical APR reaching as high as 29%. An alternative to this option would be researching online for credit cards, which normally offer deals such a 0% interest rates for a period of 12 months or less.

4.Dipping into your savings

Although this is a more sensible option as opposed to using credit, some savings plans weren’t designed to be dipped into, such as ISAs or long term saving plans and they should be left well alone.
If you are considering using your savings, which originally were for another cause, we suggest that you consider how soon afterwards you can top those savings back up. Plus, if you are good at saving, why not start saving for Christmas 2015 today? savings guide []

5.Paying full price

Yes that’s right, one of our Christmas No’s is not paying full price for the item you’re purchasing. We do get a lot of puzzled looks when we discuss this point but it’s relatively straightforward and it involves using price comparison sites, such as Kelkoo or pricerunner. Websites such as these compare thousands of products across the UK and they could save you pounds in the long run.

6.Buying directly from the retailer

Another point where we get asked to explain what we’re talking about. This point involves using cash back sites such as Quidco or TopCashback, which allow you to purchase items through their websites and entitles you to a small amount of cash back. This is perfect for all those who have decided to buy their Christmas presents online this year.

Find out more: The Twelve saves of Christmas

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