Consumers ‘Need To Monitor Finances' During Christmas

Consumers ‘Need To Monitor Finances' During Christmas
More people could be due to come under financial pressure
over Christmas, a new study suggests.

In research conducted by CreditExpert, 76 per cent of
Britons state that they are set to either spend the same
amount of money on gifts this year as they did in 2006 or
increase their expenditure. The news comes as 29 per cent
of those surveyed claim that their present financial
situation is tighter than it was last year. And as the
credit reference agency claims that the impact of the
recent series of interest rate rises and the credit crunch
has put more strain on consumers' monetary situations, more
people could well be due for a "huge financial fork-out
this Christmas".

The study also showed that eight per cent of respondents
believe that their borrowing, whether through credit cards,
overdrafts or a personal loan, will increase in the weeks
leading up to the Christmas period. Meanwhile, about half
(47 per cent) of those surveyed think that there is a
social pressure for them to buy expensive gifts.

Jim Hodgkins, managing director for CreditExpert, said:
"During the festive season, most of us spend more than
normal so it's especially important to monitor our finances
and make sure our Christmas doesn't turn into a financial
nightmare."

He advised that while buying gifts is a "big part" of the
festive period, consumers would be wise to avoid
overspending as otherwise they could develop problems
managing debts accrued via loans and credit cards. "It's
vital we budget and take a step back to ensure all our
outgoings are necessary so we don't end up being unable to
make the repayments come January - a bad credit rating can
make the difference between being offered credit or not, so
make sure you keep on top of your credit history and ensure
you can pay back any debts before you go into the red," Mr
Hodgkins asserted.

Overall, the study showed that people in the north feel
that they are under the most pressure to splash out on
expensive gifts for their loved ones, which consequently
could impact upon their ability to make payments on
personal loans and other types of borrowing. In turn,
CreditExpert pointed out that those from the northern areas
struggle more with money than anywhere else in the country,
as the levels of consumers in the north-west and north-east
who have got into debt after overspending during Christmas
accounts for 37 and 31 per cent respectively. This compares
to the 22 per cent of residents from the south-east of
England who admitted getting into debt last Christmas.
Meanwhile, people in the 35 to 44-year-old age bracket are
the most likely to have gone into the red as a result of
exceeding spending plans over the festive season.

For those concerned about their ability to fund their
spending in the run-up to Christmas, taking out a cheap
loan could well be an advisable option, as in doing so
borrowers may be able to make a number of purchases at a
low rate of interest or pay off other debts that they may
have built up. Last month, Neil Munroe, external affairs
director at Equifax, reported that having a positive credit
report can help consumers access a loan at a competitive
rate of interest.

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Abbi Rouse is Editor in Chief for All About Loans. Our
visitors have access to loans of all types: From self
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