Christmas credit risk for shoppers
CUTTING up the cards before the festive season may seem an impossible task, but charities are urging families to avoid a credit-fuelled Christmas that leads to enormous debt.
The Salvation Army, St Vincent de Paul and Lifeline are encouraging shoppers to budget for their Christmas costs early and, importantly, to stick to a clear plan to avoid racking up huge interest on credit cards.
They have also called on people to resist social pressure, which often forces them to spend outside their means.
Bundaberg St Vincent de Paul regional president Angela Vicenzotti said a lot of people in Bundaberg were in a financial crisis.
“We have a lot of people that come here and they’re in a really bad way with debt,” she said.
“They find it very hard to pay it back.”
She said people who succumbed to the Christmas hype could end up in financial strife for months.
“It nearly kills some people. They have no money for food because they are busy paying debts off,” she said.
Ms Vicenzotti said credit purchases were generally impulsive and could be avoided.
“People don’t realise how much interest you have to pay on a card,” she said.
“It’s better to lay-by.”
Lifeline regional client services manager John Maybanks said social pressure often resulted in people over-committing during the festive season.
“I think there is a very strong pressure on people to provide gifts and supply presents for family at Christmas time,” he said.
“There is a social and peer pressure to provide as best as we can for our family.”
Mr Maybanks said advertising skyrocketed during December and people found it hard to resist.
“The shops will be heavily promoting the sale of their goods, so the temptation is greater at this time of the year,” he said.
“The use of credit is fine if you are in a position to repay it, but often people find themselves entering into credit arrangements that they are not able to pay later.”
Mr Maybanks said working out a clear, realistic budget and sticking to it could avoid financial strain.
“People can get a Christmas hangover in a financial way – the bills start in January and that’s when problems arise for some people,” he said.
People struggling with debt are encouraged to call Bundaberg’s Lifeline office to set up a free financial consultation.
“It’s much better to address a problem in its early days before it gets to the extreme,” Mr Maybanks said.
People can set up an appointment by phoning 4153 8400.
- Work out your budget.
- Start saving.
- Make a list.
- Take time out if you’re tempted to purchase outside your budget.
- Give non-material gifts.