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How to Pay off Christmas Debt

It’s 2022 but some of us still worry about Christmas! Don’t let Christmas money worries ruin the year. Here’s how to pay off Christmas Debts and gain financial control.

According to Wales Online, it takes the average Brit four months to pay off Christmas debt. That’s almost half the year paying back what we spent at Christmas.

So how can we make this more manageable?

01. Cut costs where you can

Lots of us rack up credit card debt or store card debt at this time of year because we don’t have enough money in the bank to cover all our Christmas costs. It can be easy for debts to add up without us realising how much we are really spending and then we are left with even more money-stress post-Christmas.

One way to manage those debts is to cut costs elsewhere. January is the time to scrimp and save! Lots of us will be on a health kick, so use that to save money. Fewer takeaways and more at home cooking. Maybe you’re considering dry January – this could be a good way to save money and feel healthier. Think about what of your expenses isn’t necessary. Do you have many subscriptions – Netflix, Amazon Prime, Spotify? These could be cancelled or paused until you feel like you’re in a better place financially.

02. Consider a Debt Consolidation Loan

Cutting back on costs and budgeting isn’t easy and there are other options out there if your debts feel too large to manage alone. If your debt is above £5,000, one option is a debt consolidation loan. They can consolidate debts such as store card debts and credit card debts into one – this means if you have several debts with different creditors, they turn that into one debt instead, meaning one payment per month. This could be a good option if you have a lot of different debts and are feeling overwhelmed. A solution like this will consider how much you can afford to pay back each month.

03. Look into a DMP

Your Christmas debts may be lower than this, according to Wales Online, the average Brit spends £740 more than usual in December. But even this overspending can take months to pay back. A Debt Management Plan (DMP) could be a useful option for someone in this position. You’ll work with an expert financial advisor, who will determine how much you can afford to pay back per month and help you with budgeting. A DMP includes all non-priority debts so for Christmas debts such as credit cards and store cards, this could be a good solution. There are plenty of options out there so our advice is to do your research and find the correct solution for you.

04. Start saving

It might seem too early but if you find yourself overspending every Christmas then maybe it’s time to start saving for next year. Having a small fund, you pay into every month could make Christmas much more manageable, and enjoyable, next time around. This could help you to avoid credit card debt and store card debt during the festive period.

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Don't let Christmas worries follow you through all of 2022

If you’re struggling with Christmas debts, our team is on hand to help. Christmas worries don’t need to follow you through the whole year – we can help you get on top of your debts.

Fill in an application form online to see how we may be able to help you.

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Our author Lily

By: Lily Ruaah.

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APRs from 5.8% to 89.9%

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Unsecured Loan Representative 69.9% APR

Borrowing £7,500 over 36 months, repaying £502 per month, total repayable £18,083. Total cost of credit £10,583. Interest rate 69.9% (variable). The lenders on our panel offer loans for 12-60 months, with rates from 5.8% APR to 89.9% APR. The Representative Example is based on all loans paid out by lenders between 19th Apr 2022 and 23rd Dec 2022.

Secured Representative 11.7% APR

If you choose to add fees to the loan: Assumed borrowing of £25,000 over 120 months, plus a broker fee of £2,500 and a lender fee of £250 would result in monthly repayments of £345.55, the borrowing rate is 8.6% (variable), the APRC is 11.7% (variable), total charge for credit £16,466.00 and the total amount payable £41,466.00. You can opt to pay the lender and/or broker fees upfront, your adviser will discuss these options with you.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. All rates vary subject to loan amount, loan type and status. Repaying your debt over a longer period of time may increase the amount you pay.

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