Customers Risk Getting In To A Christmas Debt Trap

With only a few weeks left until Christmas it is advised by Credit Union Australia that people should be wise in the ways they use credit in order to avoid a negative (debt) start in 2010.

Chief Executive of Credit Union Chris Whitehead said it is important to make a budget and plan ahead to minimise financial burdens. He said: “Many shoppers use credit cards to make their Christmas purchases – thinking they can pay the balance off in the new year.”

“Unfortunately, when the interest-free period ends, people find day-to-day expenses have mounted or interest rates and home repayments have risen and they are unable to service the accumulated debt leaving leaving them suddenly financially overcommitted.”

“The key is to ensure you are able to pay the balance in full each month, avoiding surmountable debt issues.”

Mr. Whitehead also said it was clear that the slowdown in the growth of an average credit card balance showed consumers had become more conservative with their plastic debt.

“While these figures show people are learning to manage their debt and pay it off quicker, there is no room for complacency and consumers should continue to pay off any existing credit card debt and spend smartly over Christmas,” he said.

Retailers expect strong sales over the silly season and Harvey Norman’s chairman Gerry Harvey said: “Confidence is growing by the day and I think we’ll have a very, very good Christmas.’

Mr Whitehead said cautioned consumers to avoid overindulgence in credit card spending by making a list of things they want to buy and then making a budget to pay for them.

“People are less likely to impulse buy if they have written down what they want to purchase before they shop,” he said.

Also read more on Christmas Debt Management Plan

Source: News.com.au

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