These last few days between now and Christmas will be the busiest shopping days of the year and UK shoppers are expected to fork out a massive £2.1 billion on their credit cards in the final Christmas rush. How will you use your credit card this Christmas?
In the seven days leading up to Christmas, British shoppers will spend an estimated £11.85 billion in total. Despite warnings of reduced consumer confidence and a slowdown in the economy, this is £2.7 billion more than was spent in the same period in 2006.
“Despite the turbulent financial markets, falling house prices and rising living costs, the boom in online activity goes to show that British shoppers are still determined to celebrate this Christmas,” says James Caldwell, director of product comparison website Fair Investment Company.
Sainsbury's research reveals that around 1.4 million people intend to spend more than £1,000 in the week before Christmas and a further 4.4 million people intend to spend between £501 and £1,000.
However, only 61% expect to clear this off their credit cards by the end of January, 15% expect to pay it off within two or three months, and 1% anticipate that it could take up to next Christmas to clear.
Needless to say, the sooner you can pay off any credit card debts the better. Credit cards are one of the most expensive forms of debt out there, so if you cannot pay off your balance quickly consider getting a new card or a cheaper loan to clear the balance in the New Year.
While it may be too late to take advantage of the interest free period of a new credit card for your Christmas shopping now, there is nothing to stop you switching credit card lender in the New Year to take advantage of their introductory interest free period while you pay off your debts.
“For those who are about it come off an existing credit card deal, it is worth shopping about to see who is offering the best rates, but remember to check the credit card small print of the new card provider before you do. Avoiding unnecessary interest charges will hopefully go some way to ensure that consumers don't end up with a financial hangover in the New Year,” says Caldwell.
If you venture out into the Christmas rush in the next few days, the streets may not be quite as manic as you expected as evidence shows that increasing numbers of shoppers are buying their gifts online.
Last month's Retail Experian FootFall Index revealed that online sales were significantly higher than purchases on the high street. And many buyers were well prepared, with statistics showing a 22.4% rise in online visits to all shopping and classifieds sites during November.
In fact, the rising popularity of shopping online could even prompt high street retailers to cut prices dramatically in these last few days in the run up to Christmas as they bid to clear their stock, so keep your eyes open for late bargains.
“The recent research suggests that the decline in numbers of consumers choosing to shop on the high street seems to be down to the convenience of shopping online rather than a drop in spending,” says Caldwell.
However you use your credit card this Christmas, try to do so wisely. For more advice on how to make the best use of your plastic over the festive season and into the New Year, check out our recent article on Cutting the cost of Christmas credit.