Analysts Predict a Confident Christmas

By Sophia Travis Staff Writer 15 December 2009

Top tips for avoiding Christmas overspending

Make a budget of what you can realistically afford - including the future costs of any borrowing.

Think about how you can earn rewards for the shops you need to use. Tesco's credit cards, for example, mean you collect Clubcard points as you spend so you can save money on your food shopping throughout the year.

Consider a PrePaid card for the convenience of a credit card without borrowing.

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CONSUMER spending will stay steady this Christmas, according to new research. Over half of those questioned were planning to spend the same amount of money over the festive season as they did last year.

The research from AirMiles found that just 11% of Brits planning to were planning on spending more on Christmas than in 2008, while 34% said that they'd be spending less.

Brits are planning to spend a just over £10.5 billion on their Christmas presents alone this year, an average of almost £300 each.

It's estimated that a further £170 will be spent food and drinks and necessary items for the home such as furniture, kitchen equipment and electrical items.

However, research by Saga Platinum Credit Cards found that cash-strapped shoppers will now be less likely to dip into their savings to cover their costs - just 13% of their respondents would dip into savings to provide for the time of year, down from 31% in 1999 - prompting the question: how will Brits be financing their Christmases this year?

Tough Choices

In the depths of recession, cash flow won't come easy for many. For many, this December's pay packet will not be flexible enough to offer a few extra hundred pounds for gifts and festive food prompting some tough choices.

Saga found that 16% of shoppers will use credit to help finance their Christmas, the same proportion as a decade ago.

It's likely that many of those 16% will use a credit card with a 0% interest rate on purchases to save money or take advantage of the extra spending with a reward credit card but some will also take advantage of in-store credit.

What's in store?

During the pre-Christmas months store card offers seem to flood in at every till point around the country.

With tempting offers of up to 15% discounts on initial purchases, they can be a difficult offer to refuse.

However, it's important to remember that interest rates on these can be phenomenal if repayments are not met. The worst offending cards are the Miss Selfridge, Burton and Warehouse store cards which all charge 29.9% if customers do not pay in time.

Those exorbitant rates - far in excess of the best credit cards available at the moment - will give some consumers a debt hangover come the New Year.

In all, it can't be bad that not only are consumers feeling confident enough this Christmas to spend as much as last year on their families and friends, they're planning to do it by spending and borrowing responsibly.

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