10 Jun 2012
Though Christmas presents have been in use for months, some young people in the UK are still paying for them. New research released by Halifax reflects that one in five UK residents between the ages of 18 and 44 is still repaying debts amassed last Christmas. Holiday misery has taking on a new meaning for these people and it may extend through this Christmas.
With the economy still floundering, many young folks hope that they still have jobs by that time so they can continue to pay these bills.
A credit card was the most popular method of payment for Christmas debts, based on the survey responses. Nine percent of respondents who used credit to buy their holiday gifts still have a balance on their card.
Some of these people say this balance will still be around after presents have been unwrapped this year.
To make matters worse, they will need to find a way to pay for their 2012 holiday gifts.
Residents of northern England reported spending the most on their 2011 holiday festivities, paying £28 more than the £502 national average. In the northeast, 21 percent of people said they were still paying for Christmas.
Despite the financial situation in Scotland, only nine percent of residents reported they were still paying for holiday purchases. Many managed to consolidate debts and repay them to get back on track financially this quarter.
Despite the financial issues that many UK residents encountered last Christmas, only 19 percent have developed a plan for covering their 2012 Christmas expenses. Halifax current accounts head Anthony Warrington reported that though all consumers face unexpected expenses at one point or another, Christmas is not one of them. The holiday arrives every December and consumers should arrange far in advance to cover related expenses.
Mr. Warrington noted that Christmas is always an expensive time of year, which makes budgeting important. By allocating money in advance, consumers avoid accumulating credit card and loans debt when buying holiday gifts. They can pay with cash or use short-term, no credit check loans that they repay with their next paycheck.
This keeps them out of financial trouble without having to sacrifice on holiday gift-giving. With cheap loans difficult to qualify for, the need to have sufficient cash or a convenient financing solution increases.
Redundancies and other financial issues have left many UK consumers with poor credit scores. These individuals may not even qualify for a credit card or loans bank provided. Their best bet is to begin saving for holiday expenses now. If they have not saved enough by the holiday shopping season, they may need to use one or more payday loans.
When using a loan to finance holiday purchases, it is important to repay the balance as soon as possible. The paycheck received after the holiday shopping spree should be applied toward the loan, as long as living expenses have already been covered.
This prevents a small loan from becoming a very expensive one due to additional interest and fees.